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    February 19, 2013
    1:00 - 4:59pm EST  

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massachusetts and the editor of electronic journal of applied research. i have to say, the form is a good academic journal but would also be of interest to people interested in politics, but not just academics. it should be of interest to everyone. it is a very fine internal. he is the author of two books with the university of michigan press. the first was "small change." that explains how political finance laws shape parties and elections in american history. he has a forthcoming book, finance laws, money, matters, and politics and unedited volume this year, "new directions in american politics." he serves on the board of the campaign finance institute in washington and received his degrees from harvard and his
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doctorate in political science from the university of california at berkeley. welcome back to cato, ray. >> thank you for having me. what can i say about the impact of citizens united? likable academic, i will say it's too soon to tell and we need more research. bob said as much. when this is done, i will speculate. i'm worried about what is happening to party organizations. it's not entirely the fault of citizens united but that in combination with speech now has made it far much worse for parties. i the more money should flow through political parties and civic groups because at least in theory parties are more accountable and tend to use their money to help challenges and are less inclined to support extremist, which is no small matter in today's polarized environment. here we go.
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thank you. here are some trends i see and how citizen as united plays into them. it did not cause them but it greases the wheels, especially since 2000 to when congress passed the bi-partisan campaign reform act. there is a redistribution of money away from can't attend -- candidates and toward groups. candidates are chiefly responsible but more is spent by others and for a while was political parties but it is non-party groups and citizens united cracked up this dynamic. -- ratches up this dynamic. there are strong incentives for collective action by partisans. national politics today is about high-stakes elections. both parties have a chance to control government and have very different views about what should be done. because of this, parses want to organize and coordinate but campaign finance laws but restraint of that.
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the laws were designed during canada-centered elections and parties to an answer that much. -- candidate-centered elections and parties did not matter that much. we did it matter that much. we knew where the money was coming from. now we have superpacs and there is a severe mismatch between a high stakes system an old- fashioned laws that force money outside the regulated system and things will only get worse as every member of congress wants their own superpac and we're going to have an arms race. i don't see it becoming evidence that citizens united will have an impact on this. let me start with redistribution. total spending did not explode like many said. at least it doesn't seem that way from initial estimates. total spending was about the same or slightly less compared
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to 2008 based on estimates by the center for responsive politics. re close to the previous election and it includes all spending. same is true for congressional elections. total spending seems to have declined by 300 million. this makes sense because the house was not in play the way it was in 2010. here is the redistribution i'm talking about. the presidential general election shows redistribution from party organizations to non-party groups. he shows a pattern which cannot be attributed to citizens united. citizens united made it more stark.
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interest groups finance less than 10%. you can see the shift when party starts losing soft money and after citizens united, just 6% of that are funded by parties compared to 36% from other groups. the party committees still out advertise other groups. nonparty groups are increasing their advertising. this illustrates two points. this reflects my argument that collective organizing was increasingly important with majority stakes government and polarized parties. parties but a key role in the -- played a key role in the 1990's. this is being challenged by non- party groups. starting in 2004, it flattens. in 2002, it searches thanks to
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-- surged thanks to its citizens united. it is far easier to support supertax. -- superpacs. when people ask me why supertax, i say don't blame it sheldon adelson. -- why superpacs. the party system has outgrown the campaign system. we talk about how parties help solve these collective action problems, but here is the problem -- a campaign finance system makes it tougher because a contrarian -- it constrains the party so much. it started with the federal election campaign act. the logical thing is candid its -- candidates control their own campaigns. individuals -- alternately there is a great system for incumbents. john made this point in his book. they build a huge war chest and vastly else than challengers. but in the party system changed in the 1990's with intense competition. that fec promoted an inefficient distribution system of money.
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the parties were treated marginally better than interest groups. the response was to use soft money to help more candidates and more close races. when the soft money was shot off, the parties turned to independent spending. then came citizens united. sadly, some of the surgeons of -- surge in soft money could have been avoided if the federal election campaign act had been adjusted for inflation. if the $20,000 limit was adjusted for inflation, the parties could receive $94,000 per year or close to $200,000 per election cycle. 8 did a study of the 199 election that shows just 1% of soft money contributions greater than $100,000. simply making these inflationary adjustments might have solved the soft money problem.
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99% would have been acceptable except for some source monday. we actually made it even worse and put the vice tighter on parties that the original federal election campaign that which was not too kind to parties. the value of a contribution in $1,974 was just $5,000. -- 1974 dollars was just %5,000. this is after people who promoted it said this is good for parties that we are raising -- what about in terms of the value of that money back in '74? so where you go? you go to superpacs. what i am trying to show -- collecting -- collective action is going on. it is more than just the parties. what these charts show is
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clusters of donors compared with 20 years ago. the out lyres are those who -- outliers spend dagon select groups of candidates. targeted, coordinated strategies. rectangles are clusters with incumbents. diamonds have non-incumbents. the ellipses have mostly challenges. in the 1990's, you see evidence groups are targeting non- incumbents on the republican side. but mostly it's in the middle pursuing similar strategies, supporting incumbents. with get 2010. -- look at 2010. there are unique allies with groups like club for growth and the nra with highly -- the median amount coming from these groups is much larger today and this gets to brad's point because it includes independent spending, unlike 1990. if you know all this, but the larger conceptual point is
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parties are clearly relying more on allied interests groups to do with party organizations typically do and that is to find their challengers. -- fund their challengers. it's a double-edged sword. these challengers are better supported that never. maybe there is more competition, but they are supported by groups i would argue have rather narrow political agendas and this dynamic is probably a source of polarization. citizens united will probably give more electoral influence to these groups. but here is the puzzle. can i have a glass of water? here's the puzzle. it's not clear citizens united is having much influence at all. i'm not even sure all of the spending is making a difference. bob alluded to this.
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it might just be an arms race. the was the basic analysis of the 2012 elections at northwestern and they found no impact of total outside spending on chair and house races. millions spent had a tiny a fact, -- tiiny affect, these races. republicans clearly have a financial advantage. but if you look at the blue dots to the right of the line, they lost a lot of these races. there's no correlation. all of these republicans had extra spending. look at all the blue dots. another way of looking at this is a way to see it's going on in the american states.
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we look at states that put in place corporate spending bands and union spending bands since the 1960's. this is before service and united. -- before citizens united. we look at election outcomes and want to know if democrats did better if corporate banks helped them. any deviation from the middle line -- you can see the coefficients are really small, almost zero. often the opposite of what we expected. republicans benefited in kentucky, so go figure. we also look at whether they did better and found no evidence it's having any effect. been over all, i would say citizens united has accelerated the flow of money to groups but it's not clear how much
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difference it made in election outcomes. nonetheless, candidates may perceive this money matters and guess what, perception often matters. these groups are going to get attention from candidates because they fear the more they want their support. the parties are a much weaker position and i see that continuing. incumbents in both parties are anxious about this spending they cannot control. they might try to ease the law's on parties and bring back some form of soft money. i doubt that's going to happen. more than likely, every member of congress will aspire to have their own superpac. then we are truly in a campaign environment with parallel worlds. this is the matrix. one world is heavily regulated and one that is not. side by side. i will stop there and take questions.
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[applause] >> great stuff. i am reminded of his colleagues and former teacher he said to me recently at the time of mccain-fine gold, we thai -- we tried to tell reformers of the pass -- if you pass this, you're going to weaken the party's. but i want to get to questions and answers. all lot of people have come in since we started. many luminaries of campaign finance and the washington area are here today. just raise your hand that till the please wait microphone arrives. then identify yourself and disclosure is voluntary. you can say who you are affiliated with if you want to or not.
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please indicate if you want to direct your question to one panelist or the other or all three. also have your question in the form of a question. let's start with the gentleman down front here. >> i'm curious if mr. bauer wants to respond to the point that was made about the effects on the parties of these trends. i don't think you talked a lot about that. the other speakers mentioned that as a major trend and possible concern and whether you see it as a concern or something that should be dealt with? >> setting aside the question of what can be done about, that raises a very interesting academic for a theoretical question about the extent to
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which political party development is shaped or affected by legal regulation, whether the law can actually build a successful political party. on the other hand, a lot can affect the availability of resources. without any question, i don't think this is even something anybody spends -- need to spend time arguing about. it's one of the few points that could be removed from the typical contention from the campaign finance debate. parties were shut off from certain resources to the bipartisan campaign reform act, mccain-fine gold. those are available to other actors and the political process and there's no question parties have been dealt a significant blow in the financing available to them through legislative developments
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in recent years. party financing could be restored at or what is defined as hard money could be redefined. limits could be increased further. but it's not clear if there is any move in that direction. >> any other questions? the gentleman in the back. >> on with the friends committee on national legislation. do the speaker's seat congress taking up the these issues in the next two years? >> some people are closer than i
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am but i don't see this coming in at all. the president has an agenda that doesn't seem to include this as far as i can tell. the legislators are so far apart on this issue that they can't even agree on basic transparency laws. i get the sense republicans thet to increase money for parties. democrats strategically seem to do pretty well working with outside groups. maybe it is from their legacy of working with unions. i don't see them doing that. i'm curious to know whether there will be further deregulation. >> but it's unlikely congress will do anything for the reasons that ray has mentioned. there are a couple of issues.
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one is the insistence of a pro regulatory community is that nothing has changed. they have offered the same solutions that offer for 30 years. more limits, more restrictions, grind everybody down, and that's a nonstarter. it's not going to go anyplace. the well has largely been poisoned even on something like basic disclosure. it is going is to have to be realistic in recognizing we don't need to be disclosing every $300 or $500 donor. there are reasons why people might want to protect their anonymity. but quite frankly, chuck schumer poisoned the well on this two years ago. when they introduced the disk -- disclose was that as a
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rapidly partisan act that would have prohibited a lot of speech that was legal before citizens united. he said, the deterrent effect shouldn't be underestimated. i don'tu've done that, see there's going to be anything that would come before that, otherwise there might be a chance for some reform regulation on disclosure. that would do away with what we would call junk disclosure or serves no real public purpose at all. >> i would only be guessing, but there has been a significant development in the back -- in the campaign finance reform debate.
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the conflict over the disclose act -- many of those skeptical about regulation in the past have argued at many of them are to be found in the republican party, even if there are significant risks to expenditure limits and contribution limits, that the answer lay in disclosure. that argument has radically shift on the republican side in a way that is quite alarming to the proponents of transparency in the sense that rather than beating transparency as maybe the core appropriate measure the government can take in campaign finance regulation, it's viewed as the means by which the government smokes out its enemies are partisans and the government spoke out their enemies so they can either intimidate them or take further action against them. it has shifted the debate on transparency dramatically from one where there was some bipartisan consensus to one or bipartisan consensus is a appearing to collapse.
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having said that, there is a view, and i don't want to overstate this, that some measure of transparency is necessary and there are concerns we're headed into a direction where we are going to see less of it. brad says, and have no reason to doubt him, that there is an overstatement republic debate about this rick -- this election-related advertising. itbe it's not explicit but is intended to influence elections. he believes there is less of this undisclosed spending than people imagine, but as i said earlier, one would have to be worried about a trend. one would have to worry what we're seeing now may or may not be an indicator of what we would see in the not too distant future. i think there will be an active
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debate at some point, but i don't know when. as a larger question whether congress would take any substantive action, given the legal environment in which we are operating, there's a lot of uncertainty about what to do. exactly what ways to shore up the bottle, and i think that's one of citizens united legacies, to underscore the resistance the federal judiciary is putting up to some of the steps that congress would have to take to strengthen the campaign finance regulation regime. >> in d.c., we always tend to focus on congress but there is likely to be more action in the states. we see a number of states doing different things, including states talking about doing some of the things that have been suggested, liberalizing the regime for parties or raising contribution limits
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substantially while others are still trying to figure out ways that if we could just crack down on the staff, all of their problems would go away. the states are more likely where we will see action. >> clearly the most important person now as to whether anything will happen is senator mitch mcconnell. we don't know what's going to happen to the filibuster in the next few days but it seems unlikely he will be totally deprived of it. his views are a matter of public record, including a speech back in the spring -- and i'm told also senator mcconnell, people who purport to know his views, feels on the been like -- feels on something like disclosure that he has this extreme slippery slope idea. any kind of movement on things that would seem to have support, he is worried about it but he
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believes with mccain-fine colt that he wasn't forthcoming. -- mccain-fine gold, that he was forthcoming. in doing that, he ultimately got rolled down the hill. his strategy was to simply say no. that would suggest it is the case, and i don't have any real insight that would suggest there is not a broad scope for doing anything. but it is because of what happened in the past in this area, at this area has long passed. >> -- has a long past. >> the gentleman in the middle.
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>> i'm a reporter at the center for public integrity. we heard a little bit today about the importance of nonprofit that the vehicle for citizen engagement and collective action, whether it's express advocacy or issue advocacy. recently, the obama campaign has decided to roll over much of its apparatus into a 501c4. reformers often talk about the worry of large donations going to a group whether it's a political committee or this type of committee and i don't know if you were helpful in setting the 501c4 up, but i was wondering how risky it might be to have a city -- a sitting president working for or raising money for a 501c4. >> i have not attempted to
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separate my comments -- i do represent organizing for action, which is the name of the organization you are referring to. i would simply say as you know, i will not be involved in electoral activity at all. in that sense, it's not to be confused with activity in an election cycle, the types of concerns the campaign finance sector we're talking about here today. as you know, it is devoted to federal and state public policy and issue development advocacy. it will be operating therefore as a social welfare organization. without going into tremendous amount of discussion about people's views of the feasibility of such an enterprise, i would say this --
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the business of communicating on issues in this country and involving one's self in the day-to-day business of grass- roots requires resources. the largest issue we all face is in a country of this size and complexity and even with developments like internet communications which have reduced the cost of participation in some respects, there are significant issues of resources that you face in engaging in what is healthy, robust, significant political activity in this country. to the extent there are large resources required, there are steps you can take to manage for any of the risks you identified. those measures include disclosure and organizing for action will be disclosing its donors.
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>> that gentleman in the back at his hand up. we will try to get to everyone. >> and bill allison from the sunlight foundation. when we are talking about superpacs -- not really talking about outside spending groups -- when you look at these organizations, some like 95% of that have a former rnc chairman or formal -- former congressional committees -- they are usually former insiders running these organizations. is the problem here much more what was impressed at the fec with the understanding that what you have is a revolving door problem.
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if the old party officials taking the money and have their role and are able to contact members of congress and administration officials, is that the situation we are in? not that this is an outside spending problem as it is a revolving door problem? >> i don't know what it would be exactly. any group spending money is likely to be run by allies of the candidate. there are a limited number of people who know how to do this type of work effectively and to what to do it. sometimes we see these things saying it's really independent, it's run by a former adviser -- of course it is. it's not going to be read by some guy who's never been active in politics a single day and his wife and wakes up and says that going to start a $20 million superpac to support mitt romney. i'm not so sure you can say it's a revolving door. we usually mean between people
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working in government and the people working in the private sector and cashing in other contexts, not people cashing in -- of people working in the privacy -- in the private sector and moving to a different job in the private sector at cashing in on their contacts. i'm not sure that something that would work very effectively. most of these people have not been government employees. i am not sure you can say it is a revolving door. we talk about the revolving door, we talk about people working in the private sector and cashing in on the contacts. most of these people have not banned government employees in the traditional way we think about the revolving door, like karl rove, not like he was a commissioner of the s.e.c. i think there is a big mistake often about what it means to say something is coordinated and
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why coordination is prohibited. at the most core level, coordinated activity counts as an expenditure in a contribution to the candidate because when one puts limits on the candidate, you do not want to say, here is a copy of my campaign literature, it would be helpful if you could distribute a million copies of this in these places. that is the same as a contribution. it also served the purpose of doing away with a difficult burden of proof issue. prior to watergate, you could walk into a congressman's office, leave some cash, and say, "i hope you are going to support that bill. there is a campaign contribution, but i'd just as leave nobody knew about it." you could do that. that was an open invitation to bribery to people not knowing what conversations went on. it is not that the court really meant they had influence on a person, they said they are not corrupting in the sense that
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people are not sitting down and have to think that's the same conversation. i will give you this money, i will spend it this way, and the candidate says here is what i need you to do. it is an effort to extend bribery law into an area where the burden of proof was difficult. we make a big mistake in thinking that somehow the candidates and allies of a candidate are going to have nothing to do with a candidate, they will not be identified as supporters, that they will not have contacts with the candidate. it is an extreme position to think we can do away with that and have -- that are isolated from public opinion. that will not happen. i do not think that answer gets us closer, in the assumption has reflected realistically on what the reason is for prohibiting coordinated expenditures and treating them as contributions.
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>> my concern about superpacs is you have all the political talent moving outside the accountable channels, and they can draw huge salaries. little cost control. that is one thing, that you will see a -- the people in the party. they can coordinate with other groups. it is crazy that political parties cannot be part of that, and i think it is great -- the graph i showed of these outliers, they are coordinating. the recent -- on this promotion of parties is i like to see consultants are telling people, officials, about where to spend the money. i like that internal combat. it makes people more
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accountable to each other, they get their messages out. that is what the broad coalition of parties is about. that is my concern about superpacs. >> another question? the gentleman on the aisle. >> i would like to follow up on the superpacs from a slightly different angle, because i found it interesting, your last point, where you mentioned the incumbents are panicking so they are setting up superpacs. when you look at the politically active superpacs in 2012, 48.9% of them were dedicated to a single candidate, just one candidate. doesn't this suggest that perhaps incumbents are indeed setting up superpacs and that as a result perhaps it would
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justify regulating superpacs under the same rules that apply to candidates? >> yeah, that is exactly what is happening. i do not know how you are going to regulate it. lawyers could respond better, but i see that -- it is obvious the candidate is getting his or her consultants to say set this up and protect me and help me. that is obvious. i cannot see -- it gets to how aggressive is the fec or the irs going to get in helping with regulating these. it is beyond my -- >> a great many of the superpacs are not related to a single candidate. you have to think about using the assumption as correct, but what is the supporting purpose,
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principle, that you could treat everyone that they are the same as the candidate? that has been rejected in decisions talking about independent speech. i think there are minor changes that one could consider. the fec regulations were written for a candidate's ability to select prior to the citizens united decision, and even the speech now, the idea of a single-candidate superpac, but you might tweak rules regarding solicitation so candidates cannot solicit for a superpac that is only supporting them, to do a blanket assertion that we are to treat them the same is exactly what the courts have struck down, and the
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thinking that takes the approach that essentially we are all criminals and the government needs to be protected from us rather than most of us engaged in public speech and political participation because we want good things and we are good people, and maybe we need to be protected from the government. >> to stick to the law -- and not to the public policy -- i think the fact you have a large percentage in the aggregate devoted to a particular candidate, does not get you around constitutional issues. the fact you have that pacs devoted to a particular candidate, that there are a lot of them, will not help you navigate around the legal problem, the way the law has been set out at the time. the fact that the people
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involved in superpacs are supporters of the candidate they had had prior relationships to with that candidate is not enough, even if there's a whole host of such pacs to get your around obstacles to regulation. that is pretty clear. >> gentleman on the aisle, final question. >> thank you. i want to raise a bit broader issue here. from its inception, campaign finance regulations and that massive amount we have today has been testified as a way of preventing corruption, or its appearance, by which the court has said quid pro quo, and yet we have heard little about that this morning. brad got close to the issue.
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mr. bauer spoke about an alternative, about a level playing field, and has given that short shrift. how much at does this rationale play in any of the minutia that this cottage industry that you folks belong to is engaged in, or what other rationales are at play in this? >> it is a living, roger. >> i will comment, try to be brief, which is hard for me. i think first there is an important difference between influence and corruption, and i think one of the things that court has rejected is influence equals corruption. politics is all about influence, and one, that said, if we had equal influence, why would anybody participate in politics?
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why would we come to washington? some of these people -- this obama guy has tons of influence. so we all have influence. you can think about that, we all have an equal influence, and the court rejected that idea. increasingly, because the court has rejected the equality rationale, or form arguments -- reform arguments which are primarily in my view at least at the academic level based on equality themselves, or disguise themselves in the corruption argument, and as a result they further confuse. they talk about it being corruptive. when you look at that actual
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legislation where ideas get ground into legislation, oftentimes equality all has something to do with it. we have to stand by your ad provision. brad smith and i approve this message because you idiots could not figure out that the campaign was approved by me. that is how i would do my disclaimer if i were running. which is why i don't run. why was that there? the congressional record is very clear. they thought it would reduce the attack ads on them, reduce negative adds, and you saw a lot of back in the mccain- feingold amendment. this is one -- and you see it in the enforcement process where complaints are partisan
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driven, and this is one of the problems with the idea that you can have a benign regime of political activity. you cannot do it. it's all to be bound up in the partisan politics of the day, and that makes it a dangerous area for the government to regulate. >> this is a cottage industry looking at corruption in the quid pro quo sense, and it devolved it arguments over statistical modeling. we cannot demonstrate whether someone is being corrupted by getting contributions. the research has gone more into an agenda setting to see how members might not talk about issues or push other issues. that is one of my fears of the superpacs, they have a powerful role in the agenda setting, and the threat of throwing more
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money into a race can make people not discuss issues. that is where discussion is moving now. it is not open to the law. that is built on a quid pro quo corruption. i do not know where you go from there. >> it is true that in its most starkly expressed form, the equality rational is distinguishable. if you imagine a world in which there were a handful of speakers, responsible for funding campaigns, then somebody would have a concern, would be able to call upon the people who they funded for a sense of obligation, and that that leads to corrupt government.
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there is a quality argument that gets treated separate, but it is not altogether separate and is always a concern. secondly, the appearance of corruption and corruption, the court has said loosely it would support a government regulation in campaign finance to the extent you have gross inequality in the access to campaign finance opportunities, access to participation in the electoral process. there is obviously a potential threat to public confidence that the government is really working on behalf of the broader public interest. lastly, the member of a cottage industry, i was glad you raised the question about, one of the waste corruption flips away in a highly regulated system from focus and something else takes
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his place is in the conception that even the supreme court has discussed in circumvention, where the conduct being challenged is not corrupt, it is conduct that is effectively thought to get around rules, thought to circumvent the rules, so the thought is an attack to the conduct in relation to the law. and of members and the mccain- feingold were to address circumvention, primarily a threat to the law that was a bulwark against corruption. the minutia is, who is trying to get around the law? >> we are now going to go to our break. the coffee will be available in the winter garden. go out and take a left and go out toward the front of the building. please come back for our next
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panel, and join me in thanking our three expert panelists. >> thank you, michael, and i am happy to be here at cato. i want to set up a description of the problem, and want to react to the characterization of that problem from this morning. there was a report that was published last week that tries to put the recent election in some context, and so this morning you heard the claim that effectively citizens united and the subsequent decisions represented no change. here is the outside spending before citizens united and after citizens united. that is a difference that even a statistician could notice. [laughter] also the claim that there was
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not much secret money. here is the amount of money where we have no way to identify who the donor was. that is also a suggestion that the existing system is good for the challengers, not so good for incumbents. the reelection rates have been going up in the senate, stayed the same in the house, and if you look at funding differences in the house incumbents' challenges, house incumbents raised 5.4 times the amount of money as challengers, and senate incumbents raised 4.2 times the amount of challengers. that is my disagreement with the suggestion of this morning, but here's my agreement. i do not think that -- i think we are obsessing too much on this decision by the supreme court. i do not think citizens united is the problem. to understand the problem, i need to tell you a story, and i am told all stories begin
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something like this -- once upon a time there was a place called lesterland. i cannot tell you this, so it is a secret, but my first name is lester, so i am here to make fun of lester. lesterland looks a lot like the united states, has about 300 million people, and of the 300 million people, 144,000 of them are named lester, which means .05% of people are named lester. there are a two election cycles every year in lesterland. the general election, all citizens over 18 get to vote. in the lester election, only lester's get to vote.
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here is the trick -- in order to run in the general collection, you must do extremely well in the lester election. you do not necessarily have to win. but you must do well. what can we say about this picture? we can see the people in lesterland have influence over officials, but only after they have had their way with candidates. number two, we can say, dependent on the lesters, we will produce a spending to keep these lesters happy. number three, -- that angered the lesters is highly unlikely. that is the picture of lesterland. problem in our government is not citizens united.
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i want to suggest the problem is lesterland. number one, the united states is lesterland. the united states has two elections. one is the general collection, - election, the other is the money election. in the general election, citizens get to vote, and in the money election, it is the funder who gets to vote. to run in the general election, one must do extremely well in the money election. you do not have to win, but you have to do well. there are just as few relevant funders in our democracy as there are lesters in lesterland. really? .3% of americans gave money in the 2012 election.
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.05% gave the maximum amount in the 2012 election. .01% gave $10,000 or more in the 2012 election. .003% gave $100,000 or more. .000042%, 159 americans, gave 60% of the superpac money spent in the 2012 election. i think it is fair for me to say .05% is a good estimate of the relevant funders, and these funders are our lesters. if you think about the great stuff said about the small- dollar contributions in 2012,
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total amount was $330 million. 34 lesters gave as much as all the small-dollar numbers combined. this is what we can say about usaland. citizens united is ultimately correct. as in lesterland, only after the funders have had their way with the candidates who want to prevail in that general election. number 2, obviously this dependence on funders produces a subtle understated bending to keep these funders happy. candidate spent anywhere between 30% and 70% of their time to raise money to get their party back into power.
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as any of us would. they develop a sixth sense about out what they do will affect your ability to raise money. they become shape shifters, as they adjust their views and light of what they will know to help them raise money. a democrat from virginia said always lean to the green. to clarify, she said he is not an environmentalist. point number three, anger that reforms the founders is highly unlikely. the united states is worse than lesterland. you can imagine if we lesters get a letter say you can pick the candidates, you can aspire to some aristocracy of ideals to make the government a better place.
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lesters come from all parts of society. we might think it is our job to act in the interest of lesterland. it is possible that lesters act for the good of lesterland. the shifting coalition of people who comprise .05% are driven by issues just over the horizon that congress will address after that election. they are not being driven by a conception of the public interest. in this sense the united states is worse than lesterland. whatever one wants to say about lesterland, in usaland, as in lesterland, it is corruption. by which i do not mean cash in
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brown paper bags to members of congress, by which i do not mean rod blagojevich corruption. nothing to do with influence peddling. i mean corruption relative to the framers' baseline. they gave us what they called a republic. by republic, they met a representative democracy. by representative democracy, in the words of madison, they meant a government that would have a branch that would be dependent upon the people of law. -- people alone. the people and the government, producing an exclusive dependency and so would the public could be found through that exclusive dependency. here is the problem -- congress has evolved a different dependency, the dependence not upon the people alone, but increasingly a
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dependence on the funders. this is a dependence. it is different and conflicting from a dependence upon the people alone, so long as the founders are not the people. this is a corruption of the design and the intended set of influences that the framers gave us in designing our republic. this correction has an effect. we could mark its effect by thinking about the perception people have our government, because the fact is americans believe and i think they're right to believe money buys results in congress. for a poll that was conducted last fall, we found 75% affirmed that claim, higher democrats than republicans. here is the one thing we all believe -- money buys results in congress.
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that belief weakens trust in the way the institution functions. last year it was found that 9% of americans expressed confidence in congress. that number is probably 5% now. we have to think about this number now in context. it was the case at the time of the revolution that higher number of people had confidence in the british crown than the people who have confidence in congress today. weakening trust weakens the drive to participation. rock the vote turned out the largest of young voters in 2010. they found in 2010 a significant number of new voters were not going to vote. the number one reason was no matter who wins, corporate interests will have too much
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power and prevent real change. it is not just kids. the vast majority of people who could have voted in 2010 did not vote because of this belief, and even in this election, 40% who could have voted did not vote. it is not mere perception because this perception has any effect, any effect on how people -- with their government, which is reason enough to draw to a system that might change that perception. let's focus on a reality. by reality i mean economy of our political system. this election has its own economy. the economy as two components. one is an economy of stop, and the other is the economy of
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extortion. the economy of stop drives us to understand to point to the instability in our government. any system where the tiniest slice of the public dominates in the funding produces a system where a tiny number of americans can effectively block any change. it will always be that or at least almost always be that in the context where some much dependence exists on such a tiny number of participants. it is just a couple thousands who have to band together with these contributions to effectively make it possible that in our structure of separated powers you can block any change. this is an economy that depends on polarization. people point to polarization as the cause.
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it is an effect. it depends on the dysfunction, because the more dysfunctional the institution is, the easier it is to sell this opportunity to block. this function is the business model, which is what a journalist points out lobbyists who profit from the dysfunction of this are fighting against the reform of the senate, which might weaken the opportunity to block a change. the point is if you stand back cares about, whether it is health care reform on the left or a government bailout on the right, global warming on the left, complex tax system on the right, financial reform on the right, if you connect the dots and understand the structure of incentives, we recognize there is no possibility any sensible change until you change this corruption because it is this
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corruption that makes real change possible. that is the first dynamic for stop. the second dynamic is the coming of extortion. i want to focus on the lesters here, i want you to think about the .000014%, the members ofthe dependence creates its own dependency. congress, the dependent, creates its own dependency, and the society, in the economy, as a way to feed its dependency. two years ago "the wall street journal" was puzzled about the tax extenders. why is there such a significant rise in these extenders'?
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the first extender was given to us by reagan. they made it temporary to see if it worked. did it work? democrats and republicans both agreed it worked. the puzzle is it is still temporary to this day. why is it? what explains its temporary character? the principal recipients of the research credits are large manufacturing corporations, and these entities are more than willing to invest in campaign donations. the institute for policy innovation says this cycle has repeated every four years. congress allows the credit to last until another extension is given, preceded by a series of fund-raisers about the importance of nurturing
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innovation. congress uses this cycle to raise money for reelection, promising more predictability. the dependent create its own dependencies. think about medicare. medicare had something about the sustainable growth rate, a system to plan to cut the reimbursement rate to doctors. the plan was to cut this each year so that eventually the amount was given back to the doctor's office. that has created a cycle that is as predictable as cold januarys in december. every year the doctors getting the doc fix, a delay at the reduction, and it comes after enormous amount of lobbying to doctors, flushes an enormous amount of money into the system in exchange for this fix. think about the fiscal cliff
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legislation. this change at tax extenders, the doc fix, but this week it came out that the gift to drug makers, a provision that forced a change in the way that amgen would be priced. that would be delayed for two more years. the cost to taxpayers with something like $500 million because of that extension. again -- and my prediction is that the system will continue to support the extension. it is not just tax policy. this is the telecommunications act. al gore had the idea we restructured this to create a
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new title vii, which would have all internet-related infrastructure fundamentally deregulated, far more than what is being discussed now. when his chief took this to capitol hill, no, if we deregulate these guys, how will we you raise money from them? this is the economy of extortion, because fundraising is the key to the activity that congress engages in. what is the solution? just two minutes. remember, the problem here is not money in the abstract, the problem is not the amount of money. i do not know how much money our system should have in the political system. i support the idea that maybe
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there should be more money. the problem here is the kind of disciplining practice to invoke a practice of candidates spending tons of time fund- raising from a tiny slice of america. it is not a solution to that problem, not even close. my view is we should have disclosure, but it does not solve this problem at all. no change in this dynamic. it is not a solution to talk about the thing that common cause is pushing, using slogans that corporations are not persons that need to be inserted into the constitution. tomorrow, if we could come up there, would be no change to the dynamic of tons of time spent in fundraising. it is not quite enough of a reform to talk about the idea
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that roger talked about to say let's repeal all campaign contribution limits, because while that change would reduce the time you need to fund- raise, you might need to talk to 20 people, it would increase the dependents on the tiny slice of the elections. the only solution is to fight a different way to fund the campaign and push people to talk about matching funds. michael's work has been focused on matching funds. the fair elections now at tied this to a subsidy, in addition. this would increase the number of small contributions and would not necessarily increase the number of small countries. that is the concern. in my view what would be enough is to think about complementing these matching systems with
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something was described, a voucher system. i extended this to make participation conditional upon only taking vouchers and small contributions. that idea is being built upon by congressman sarbanes and his group, which has a matching funds proposal, and a pilot for the idea of vouchers. it is the idea behind the americans against corruption act. we get more citizens in the project of funding campaigns, all citizens play the role of relevant funders, and not just the lesters. thank you very much. [applause]
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>> i want to thank cato for putting this on. there are not a lot of folks put in charge of federal agencies that spend their time reading publications from think tanks, and there are less people reading publications of cato. it is an honor to be here as someone who has gravitated toward folks who work at cato from time to time. i appreciate the opportunity to be here. the topic is citizens united in the future, and there is no wrong answer, and it fits into my wheelhouse where i get to make up as i go along and some know what i'm talking about because i have a title. i do not come from the academic
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world, i come from a world where i was in private practice, representing a number of politicians, political actors, consultants, so i come at this from that perspective and from the perspective of someone who grew up in politics, who had family members who were elected officials. when you grow up in that world, what normal to me might seem bizarre to those who did not grow up in that, were apparent there will be continued costs to fix citizens united. that will not stop the editorial pages. right now there is a push for an amendment. reports are that the president may support it, not that that is relevant to the amendment process.
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house democrats have a task force, and i have never had to try to get an amendment passed, but i understand it takes a super majority of chambers and 3/4 of the states. i am not sure that is a short- term fix. maybe in a couple hundred years it will pass. what does reverse really mean? and it is troubling when i hear this, because let's remember what the case was about. it is not about making corporations persons for the first time or any of this rhetoric. it was about the government banning a movie that referenced hillary clinton that said it was unfit for her to the commander in chief. it was only banning a movie that would be available on pay- per-view cable. an adult cannot watch something in the privacy of their own home on pay-per-view because mccain-feingold banned it. do you really want to ban
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movies? the answer is perhaps yes, which is why i did not want to reverse citizens united. the second issue that came out of the decision is that all new avenues of disclosure -- i am not sure where this comes from, the reality is the court has upheld some disclosure, has struck other disclosure. if mccain-feingold were upheld in the mcconnell case, and what they want was a one-page disclosure regime for television and radio ads and movies that air on television, run within a well-defined proximity to federal election that referenced a candidate. this does not give license to all sorts of other expensive disclosure machines or calls to
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limit the reach of disclosure. the court struck disclosure in the davis case, in which most had written off on millionaires' kids, but if you read the language of davis, you could not have free-floating disclosure regimes of the sort they are now proposing. lost in the shuffle are cases such as the naacp, so there is a precedent on the less disclosure side of the aisle. there must be some seismic shift. i did say it is too early to say there is all sorts of new avenues for disclosure. there are a number of proposals. that is the disclose act.
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it was quite unwieldy. too senators have introduced the bill, but have said the language is another way to fix the problem, and there is another statute that has been variously introduced that have floated different proposals. the central problem with all of these, aside from the merits, is at least today they are not going to pass. the question is, what is realistic? what i am hearing is a number of incumbents making noise about all these negative adds.
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folks run for office, carrying their copies of the constitution, and after a few cycles of expressing advocacy that they do not think are fair, they say we need to figure out who is behind these ads. there's a natural tendency of incumbents -- and you hear republicans in the senate and house -- say that about we need more disclosure. it is not enough where we reached a critical mass, but mccain-feingold took years and years to pass. this is more of a long-term discussion. incumbency does funny things to people who are otherwise would not be insisting on disclosure. once they become part of the government, criticism comes too close to home.
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the second reason why i think these proposals to not work as they come the problem from the wrong angle, fail to appreciate the impact of other cases have had on how we conduct elections. before one fixes a problem, there has to be agreement on what the problem is. when incumbent politicians talk about the need to know who is behind all these shadowy ads, voters have information cannot that rings hollow. disclosureit of already. it is a disclaimer as to who pays for it. they tend to file communication reports or expenditure reports with commission. states have laws on this as well. sometimes they disclose donors, sometimes they do not. if someone gives money, that is
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to be spent on an election- related ad, their identity is disclosed. the reformers will say but no one will earmark it that way. then there are the superpacs, who do disclose. a number of people talk about the secret superpacs, and they need to disclose. some have conceded disclosure is designed to kill speech. senator schumer is characterized as already poisoning the well. third, speech that is critical of incumbents, it seems the incumbents are wanting to know who is behind the ad. the rally is there is a huge
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mass of disclosure. i cannot imagine voters sifting through the stock because it is too much as it is. finally none of these proposals ever talk about anonymous speech. they make give lip service to it, but what is true is there has never been a serious discussion about a bailout. what kind of showing does one have to make to not have to disclose, even under court law? the f.e.c. has opinions were they have to disclose, because they have already been able to make a showing. is it economic harm? the government has never said what one has to do, and when you go to the government of law it is an interesting circle you are and where you have to say
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who you are to say you are not who you are. another thing that distorts the process, and when i hear politicians say this and it seems we're self-serving incumbent protection. the reality is you did have corporation money include elections. there were at issue ads that said call so and so and tell them to keep fighting for us. you still had corporations and unions spending a tremendous amount of money that were not counted as campaign ads. it varies in graphs with its outside spending, has gone up considerably.
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it is not clear to me that spending in general to affect public policy in the elections and the line between the two blurs is all that different. the other part of a problem, what is corruption? a lot of us did not get a correct rationale. it does something that citizens united hopefully blew out entirely, the equal speech rationale, which permeates so much of the federal election law. there is still a kernel of truth in definitions of the problem. the cause of the problem is in many ways that reform laws that have caused the problem. the candidate's voice is getting lost in the elections.
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as one who comes from the world i come from, that is not a constitutional justification, but the reality is of voters need to vote for candidates, and when they go into the polling place, they need to be making a choice between two people and what they represent in the broad scope, not on a single issue or what they saw on television, or what the nightly news tells them. i think the central goal should be the candidate's voice be the central voice, but one of the real effects of that regime is that candidates' voices are being drowned out. the culture has been changed, shifting power away from party
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committees, single-issue groups, and those who are able to go on tv or telephones or mail or direct contact to influence the views, which brings me to the third change, how lobbying will be conducted. the money guys and the access guys are always want to be around in some form, but now you will have third way which will be easier to influence an elected official's vote by paid advertising or other sorts of things that i think have been legal for a long time, but were cloudy before, because of various regulations that congress has passed. it has rejected the equal speech argument. where do we go from here? can there be legislation?
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most of us have said no. i'm not so sure, because there are people who should not be saying things that are seeing things did senator mcconnell has staked out his position. he is the minority leader of the senate. i think in the short term that will hold true, but the long term, where do we go? mccain-feingold needs to be revisited. post citizens united, half of that has been lopped off, and you're left with restrictions on the party committees. it will hurt party committees, which has been a stabilizing force in democracy four years and years and years, and at the state and local level.
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those who say parties continue to raise the same amount of money or more money than it raised before mccain-feingold -- the cost of tv ads has gone up because it is how it happens. advertising costs of up, but also because folks to make more money by doing single-issue groups, it is harder for the party groups because of competition. it's become much more expensive. the theme of any legislation has the -- the idea of let's undo the soft-money ban will not get traction, but looking at state and local parties be something that we can get agreement on.
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the way i explain it to people who are not immersed, anything a party committee would want to do near an election is subject to the prohibitions, and even if they do not care about their local member who will not lose the matter how hard the other team tries. for state and local candidates, mccain-feingold has caused a problem with parties. coordination roles that the f.e.c. promulgated has reached out and does not accurately reflect realities. it is not corrupting, but the court rules are not tied to corruption or to the appearance. the contribution limits, if they indexed for inflation, they would be significantly higher. there is a limit on an
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individual can give. there is a number of other party issues that i think there could be agreement on in a bipartisan fashion, and the question of which comes first? the reality is, campaigns did mail in a warehouse, they do not do it because it is efficient, but because there is no spending limit. when you compare that activity to what is going on, there is disclosure that could be cleaned up. the f.e.c. has made a hash over things, and they have taken a test at the supreme court and put it on the independent
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expenditure reporting -- what you have is a catch-22. hillary the movie was the functional equivalent of an express advocacy, but if you would apply how the f.e.c. looks at the region, it is not clear that would be an independent expenditure. these are two completely different reporting regimes. if you are trying to figure this out and have 48 hours to file one of these, i would see more of the -- on that point. with that, i will sit down and we will have some questions and can continue our discussion. [applause] >> thank you. now, john samples from the cato
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institute. >> every time i follow larry i am reminded i am not mick jagger. you may wonder what that means. if you know that one time mick jagger had to follow tina turner onstage, and only he could have done it. google it. i want to integrate some responses, but i had some other things i wanted to talk about. i would want to say something about where we go from here. from a liberty point of view, are we right now? there has been for a least since about 1995 and because of senator mcconnell, a strategy
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of just saying no to campaign finance regulation, restrictions. that has worked remarkably well. it is true mccain-feingold passed, but it resulted in a soft money ban. it has had a remarkable effect, but we have to ask, why is it that to just say no had a remarkable effect? part of it is that it fits pretty well with the first amendment. the first amendment says congress shall make no law abridging the freedom of speech. it has embodied the notion of just saying no to congress and saying consistently across the board, that is our position. it has been successful, as i mentioned earlier in my comments. giving in a little bit of leaves to a set of problems.
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what i want to ask is, is that the future? is that the way to go? what remains to be done? what kind of restrictions are there still on speech? i want to start with incremental things that will be discussed and tried to integrate things about larry's comments and then go to non-incremental outcomes before finishing. let's start with the incremental. prohibition should be of the greatest concern to people concerned about freedom of speech or liberty in general. what provisions are there on financing political activity? in terms of prohibitions, the one that sticks out is the prohibition on foreign nationals being involved. the decision has been made here. we can go on about that. you can actually argue about it. probably not as solid as most,
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but i do not see the point. arguing for a foreign national participation is an idea that is so heavily weighted with negativity that there is nothing worth the cost of bringing that about. i think that will probably be not at the center of concern, at least in the near future. in terms of restraint, contribution limits within the system are going to continue. heaven and earth was moved in mccain-feingold, part of a big deal to get contributions raised inside the system, contributions raised to a point where there were still below the inflation rate of 1974 so we still have not recovered the real value of them. if you want to go outside contribution limits, there is likely to be vehicles, organizations, and the ability to do so will be guaranteed after citizens united. do you want to go down this
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stage, put a lot of effort in trying to get rid of contribution efforts when they can be, if you want to get more than that, there is a possibility. if not, giving directly to candidates of parties. there was the coordination limits network -- that was mentioned earlier today. there is a good chance of that falling, but it has not fallen yet. they may loosen those limits. that will be something that we can focus on and mention a few are concerned about these issues. i do think there is an issue that was not raised earlier today in talking about parties. libertarianism is particularly sensitive, even if they're not associated with a party. the sense that the parties have a central, controlling role and they do not like outside forces. there for enhancing the party rules and the party role is
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something that has downside, too. i suspect the answer is the people who are outside the system, i do not know this but i suspect it is the case, that if the rules of the game were different, that much of the money that would go to outside groups would go to parties. the soft money era found its way to the party. i would not suspected to be so. in that sense, the libertarians should reject it. you are not preventing an outside source from having a role. there is some demand for that, but not a great deal. that brings us to public financing. that is what professor lessig reads us in the current system. his indictment, what i would say about it, a lot of the assertions that exist are
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probably quite weak. it is not conclusive literature. i want to mention that. still, the idea that it weakens trust in the congress, the perception of corruption weakens trust in congress, weakens participation. there are a host of other variables and causes that have been explored and shown to have stronger effects. that leads to non-voting or the poor perception of congress. the studies of congress have shown that you can explain the poor perception of congress by looking at the economy and the fact that most americans do not like conflict, confrontation, fighting with one another, all the stuff that goes on in democracy and compromise has a big effect in driving down congressional approval ratings. another empirical issue that i know something about was the medicare.
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the money argument has been it is a single variable, a single explanation of all the things that go on in the world. the doc fix, why did it happen? the refusal to cut provider payments in the medicare system. you have contributions and so on. in the 1997 period, when there was a cut in providers, they always go after provider's first. what went into effect and what happened? people stopped providing medicare to the recipients of medicare. that is politically active people over 65. they went directly to their representatives and, sure enough, you ended up with a doc fix, which i suspect is fixed only with a fiscal cliff. there is another explanation. it always does not have to be a
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small group of people controlling everything. which leads me to my next question before i get back to public financing. professor lessig's understanding of corruption is dependent on the phrase by james madison that any kind of motor or effort that is driven by anything other than the people along, and a general understanding of what the republic was in federalist 10. it talks about how complicated the problem of who the people are and what they do and how you have a system that is a stable and lasting republic. the concern, as you may recall is that medicine is concerned with factions. he is concerned with minority
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factions and majority factions. he is particularly concerned with majority factions and the effect they would have on the rights of the minority and the permanent interest of the community. as far as i know, if you look at the first amendment, it does not say that congress shall not abridge freedom of speech unless they're talking about a small number of people in the primaries. in fact, people have the right to do that. that is part of the federalist number 10 idea, that people have the right to fund a candidate to make their case. i contend that the notion of the people alone is an ambiguous idea. it is a horrible strategy because everybody knows what the people want. the only problem is, everyone has a different perception of what they wanted in their own head, they know what the people would do and the things that happen are different.
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therefore, we have corruption. the federalist no. 10 is more complicated than that. if you are trying to have a system in which people -- now, professor lessig's response would be that the primaries are controlled by a small number of funders. if that is true and these people are individuals, why is it the case that during the big money era, 1996 and after, both parties have become much more physiologically sorted. the democrats have become much more liberal. republicans controlled by their small number of contributors in the primaries. the democratic party is much more to the left than it was in 1996 or even 2000. during this period, how does that square with a bunch of rich people control everything? it does not square very well. the answer is, despite the fact
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that private money is about to destroy us, their answer is not getting rid of it, at least not in the first instance, in part because it is unconstitutional. the answer is public financing, a voucher system. the problem with public financing is, from a libertarian or liberty perspective it is, you're going to have to coerce people to give up tax money to spend on public financing. you have to ask yourself, where does the coercion come in and why does it? most public financing campaigns are not like that. it was very unpopular with most people. the problem of public financing, even if i were to agree with it or be open to it, is that people do not want it. that is one of the incumbent
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concerns, another reason why you do not have it. the other problem is what might be called a slippery slope argument. the idea is to get public financing, public financing will then have great advantages or turn out to be a great idea. at the end of the day, without banning private financing, you can crowd it out. whether people or to give money now cannot give because of public financing and so on. the idea is to set up a system so that, without forcing people, i am not going to distort what he is saying, he is not saying to ban public financing or make it illegal, but it is interesting to me that the central ethics endorsed the
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notion from a central campaign that the candidate they take financing from, and they pledge, legally they may be required to, to take only public funds. if you could get everyone to take only public funds, then you have gotten rid of private financing. the private financing act is a real constraint on government, at least potentially so. it also can expand government. we have to be honest about these things. some of it, in some measure, without getting out of hand about this, some of it is caused by, mediated by campaign contributions. however, if you have an all voluntary system, including money coming from people voluntarily, you have the problem that this might be an attempt to crowd out or eliminate public financing. private financing, you want people to run campaigns on the
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government. you want them to be able to constrain the government. that is why it is important. other things can be said. many things can be said about what central ethics said. public financing does strike me as, depending on how it is done, if it is done on a voluntary basis, it is certainly much less objectionable to a system in which you have restrictions and prohibitions, like we have had for about 30-40 years. tax credits also, we probably want to talk about it. they have some of the same issues. i want to talk about disclosure real quickly. disclosure is going to be what most people are talking about for the next couple of years. we have a disclosure system for
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many years in the united states. consider this. once you are outside the system and, according to citizens united, you are outside the sphere of corruption as a legal matter. that means disclosure, which has been approved by the supreme court, has basically two justifications. one was to prevent corruption. if you are outside that kind of rationale, the rationale for disclosing these kinds of post- citizens united spending is gone. the other is that disclosure helps voters, informs them, educates them, helps them cast votes more sensibly and more in accord with their own concerns.
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it does this by telling people they are supposed to look around and see how people they know contributed. that could be their neighbors. it could also be nationally renowned figures, endorsements. it is this cue taking that it helps voters and gives them more information. this is the political science idea. political science has shown, maybe it is the only thing that political science has shown. voters, for the most part, do not have very much information at all about candidates, elections, and politics. they need a great deal of information. one of the things going on is a collective action problem. somebody has to pay for informing voters. i would come back to the public financing issue, which is it is pretty clear that citizens do
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not want to, which could be seen as a problem. it is also a long-term fact. disclosure -- my point being, about the information, disclosure of corporate heads and these people, voters most in need of some sort of disclosure are not going to have information about these people. they will not have any useful information of -- out of most of the things that are forced to be disclosed about citizens united. they are not going to get any good -- they may or may not know who the rep is. how are they going to know what it means for some individuals name or job or whatever is going to give them information? what we need to do is come up with better alternatives. at this point, the just say no
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strategy has been one of saying no. i have illustrated why i think it has been fantastically successful. with disclosure, we need to think about alternatives to disclosure, which has also the effect, probably, of tilling some speech, which is a first amendment value. could we have a plan of disclosure that neither chills speech and informs voters better? if you have these two things, it is something that would not be particularly problematic from a liberty point of view. from a general point of view, a win-win situation. this is the idea that bruce has about semi-disclosure. that advertisements of the independent source would be identified not in relation to people but in a chord with the interest that is involved.
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in the end, the kind of information that you would get from people, voters want the intermission and assess the information according to the kind of interest. they are worried about unrest affecting the truth or falsity. that kind of argument has a constitutional status in the supreme court doctrine. that is why it semi-disclosure would answer that. it would give better information and since the individuals would remain not disclosed directly to the voter, the chill would presumably be lessened. it is also true, there would be a lot of disclosure about individuals in the pages of the new york times and elsewhere as we have seen. still, the official system
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would not be that way. it seems to be something we can be behind on the liberty side and something that would point us toward other alternatives. i want to close with this -- i guess i am naturally pessimistic because i started by saying what a great success all of this have been. i have come to think that a possibility of citizens united and speech now is directly linked to citizens united. if citizens united were overturned, it is likely that speech now would go quickly thereafter. i have come to think that it is more likely that it might be overturned. it will not be through constitutional amendment or a bill, it would be done by one of the five members of the majority leaving the court. let's leave it at that.
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what would happen thereafter is president obama would insist that whoever he nominated, among other things, one of his priorities would be a person who would overturn citizens united. you would have a big fight and you could end up with a five- person majority. for a while, it would not matter much because ultimately, you still have to pass a law through congress. but you do not. the vermont legislature could simply pass a state law and that could go to the supreme court pretty quickly and get citizens united overturned. to have some kind of actionable federal effect, it would have to go through congress. there would have to be a lot to reinstate the status quo pre- citizens united. that might be very hard to do. but it is possible.
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what i'm saying is that there is risk. i think the risk is probably greater than people think about citizens united. it is not yet stable. it is unfortunate that there is not a great deal of evidence that we have won the battle of public opinion. citizens united is not a popular decision. i would be concerned about that. in that sense, i would think that it would make sense to begin to look for possibilities of the settlement that incorporates particularly speech now but also citizens united. perhaps better alternatives on disclosure and other things. a settlement in which we can all agree to find some basis going forward. in part, because, in the end, we waste a lot of time and it poisons the well of our discourse. with that, i am over my time and i shall sit down.
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thank you very much. [applause] >> thanks. when john asked me to moderate, he also invited me to step out of the world of moderator for a couple of minutes to make some comments. so i will do so and i will be very brief. it turns out that a fair amount of what i wanted to say, john has already said. the morning has been framed by two questions. one is, what did change with citizens united or the cluster of events that we label as citizens united? the other is, what should change next? first, what has changed?
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something has changed, in fact. previous vehicles have spoken to that, presented different perspectives. in law, we have heard and both bob bauer and the panel and france smith noted that it was a culmination of a long series of developments which ultimately lead to a point to use a phrase that we have used at the campaign finance institute and other publications to a point where you can see limits on what accomplished. it does not mean citizens united has done away with what one could possibly accomplished through limits. that is to say i do believe that contribution limits do relate to and prevent plenty of examples of the extortion and actual corruption in that direction. both contributions to parties and candidates.
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but limits or restrictions do not and cannot alter the fundamental dependency issues. or promote greater equality and participation, which i would be very frank in talking about. more -- nor do i think it appropriate to promote equality for restrictions, but i do think it is appropriate to promote it. when i shift to what should change, when you focus everything around citizens united, what you are focusing the discussion on is on what is present in the system. instead, i think professor
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lessig's remarks, and the campaign finance institute has talked about it in its research, they have focused on what is absent. you cannot have an effect on what is absent by restricting what is present. rather, you get that by focusing on matters that would build up rather than squeeze out. will that happen? will that approach be part of the public's action agenda? it has already become part of the conversation agenda, an important part of the public agenda. people who are identified with the reform community are very different from those six years ago. these will be talked about. talking is the prelude to action. do i think there will be action in the next two-four years? no.
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pass a bill at the federal, not directly, but these are at the state level. it is on the conversation agenda and the research agenda. is it appropriate to look at a possible use of tax money if the money is steered through donor actions? we could debate that. i would argue yes. there is no way that such an agenda can or would crowd out independent spending. that i do not think is an issue. that is the way i would frame the discussion. it is a conversation-changer as well as a conversation-starters. let me tell you what we will do for questions and answers. there are microphones. please wait for the microphones.
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announce yourself, direct your questions to one of the three speakers or all. where is the microphone now? we can start. the microphone is already situated in the middle ear. put your hand up if you would like the microphone. you may choose where you will go. we have some people to have not asked yet. we have one here, one there. >> my name is david. i could describe myself as a democratic political operative. i would like to direct my question to mr. samples and take issue with your contention that public financing is not popular. i would point to the voters in
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maine and arizona, the ballot of public financing laws. the people who do not like public financing are many incumbent politicians. i am from massachusetts. in 1996, people in massachusetts overwhelmingly approved public financing only to have the law repealed in the legislature. my question to you is, what is your basis for concluding that people do not want public financing? >> i agree with you about the incumbents. that is part of the problem. the problem to overcome if the work problem. seeing that incumbents are able to deal with it as they do, there is not an overwhelming urge for it. the reason is in my book that i wrote. i looked at polling going back to 1938. one thing i did notice is the general trend. while campaign finance reform
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generally gets a 60-40 majority from people, for a long time, with the exception of 1973- 1979, you have anywhere from 65 to 60 against public financing. the campaign institute did extensive polling where they would talk about it. mike would say they probably got a different result. in general, i think that people do not see it that way. i think the incumbent resistance is not surprising, but, at the same time -- i would add one thing. the next 10 years, the discretionary spending at the federal level will come under heavy pressure, precisely because of the polling data. >> the question was also
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directed to professor lessig. >> one of the most troubling things about the polls, a confounding factor about americans, which is, there was a poll last summer that 80% of americans believe that every campaign finance change has been designed with the purpose of protecting incumbents. when you say congress has an idea and the idea is public financing, when the public says they do not like it, is that because of the attitude 80% of us have or is there something about the particular poll? i have seen scads of polling. depending on how things are framed, you can get the answer you want and i want, which is a very strong support for public funding. everybody knows this but nobody says it.
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why do we trust what the polls say? it is a terrible way of understanding what americans would agree about. if we had a deliberative poll, where people had the chance to understand the issues and were given the information, what would they say? i would bet one month's salary that people would say they supported change that would remove the corrupting influence inside politics. fortunately, nobody took me up on that bet. [laughter] >> this gentleman had a hand up for a while. >> thank you. you talked a bit about the federalist papers.
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madison did not disclose he wrote them at that time. is that a bad idea? >> there are a couple of different forms of that. mandated disclosure, you would probably be anonymous. there is a proposal that instead of trying to have restrictions, you have forced anonymity of all donors. my problem there is i think it is interesting, but i do not think you can sustain that kind of anonymity. ken mayer, a student of congress made this argument. i think that is probably correct. anonymous speech has its role to play. it is certainly true and it is primarily because of the chill.
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chilling disclosure can lead to anonymity. it is hard to measure that and see how that generally happens. comes from the situation itself. which is that, if you are giving money to get someone out of office, and if you are giving large sums of it, remember you are attacking or trying to get out of office, they may not seek retribution against you, but that does not mean you have to believe that going in. people might not fund kinds. it is also true there is a lot of funding where people find hundreds of millions of dollars. in those situations, i think anonymity is good. being anonymous and at the same time helping voters.
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a lot is about trying to control the other side's contributions. if you believe that, my proposal will not work. but i think my proposal for anonymous and yet informative disclosure beats all the problems we have talked about. >> start here and go back there. >> the world you have described where there are special interests that thrive on good
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gridlock and where we have the dependents who have created their own self perpetuating dependency, what do you see, assuming there is nothing on the horizon to change the course we are on, what do you see that is down the road? what is the worst possible imaginable outcome you see? >> well, it is a very, very, very dark story. there is not a single important issue we face that we will get a sensible answer on, except for the ones that get exploded. for example, there might be something around guns that gets pushed because of the tragedy. the republican party might think it is about to be extinct if it does not deal with immigration. those issues get pushed in a
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political way to get resolved. inconsistent from the theory. but climate change, tax policy, a health care system that is actually efficient and rational, financial reform, none of these issues can be addressed in a rational and sensible way. i do not mean liberal only. i am talking about conservative issues, too. so my book is a dark story about this. i think we have to confront the fact that we have lost the capacity to govern in some important way. it is on top of a constitutional scheme that is already set up to facilitate a lot of checks on the government doing anything.
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separation of power is much harder to govern with already. lay this on top of it and you make it not governable. one small quibble with something john said. the dependency line i point to is dependency on the people alone. this is not because madison one small quibble with something john said. thought there was an interesting way people wanted. that is insanely difficult. what he is talking about is the dependency. the government is to avoid the wrong dependencies. we want an executive that cannot by congress, so we have all sorts of separation to make sure the right dependencies to congress exist. they were obsessed with
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dependency the way with jane austen was, and the dependency produces the independent that is so important. the part that is optimistic and i want to emphasize this point, important way. john and i have been on a number of panels. enormous respect. he is unique in recognizing the way the debate has moved. what michael has been doing for ever, and what some of us have been trying to insist on is the old debate. whether people were saying, stop talking, we want to silence you. that is not the debate today. it is about what the alternative ways of funding might reduce the kind of pressure we think exists in the system.
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systems are just another way of funding that makes it so the kind of dependency i am talking about is easier. >> i want to have a brief comment. we are supposed to fight. but this is a more positive comment. i remember sitting in a house administration committee and i was testifying about the act, which i had studied since 2005, and the way of larry had become involved. i came in at the end of the story. i would sit there and listen and think, wow, he has had a big effect on these people and it has been very positive because it has taken out most of the restrictions. he had brought something like, he would give people $1.50 million. i was thinking, this would never pass because the members do not want it and republicans will not be behind it. but i did think larry had a
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positive effect, definitely. we will fight later, if you want. >> one more. this gentleman's hand is up. >> i want to say i think the idea of not personally identifying disclosure does have interesting opportunities to solve some of the disclosure issues. getting back to the public financing issue, i agree it will not happen on the federal level. the state incubators, we could see proposals going on in the states. my question is what do you do about the issue of independent expenditures in a public financing environment? everybody agrees you cannot just than independent expenditures if in fact they are truly independent. what do you do about them in that kind of circumstance?
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and is there something on the regulatory basis to redefine independent expenditures in a way where they are more truly independent as opposed to link to the candidates speaking? >> who is this directed at? >> professor lessig, but to anyone who wants to tackle redefinition of coordination. >> i think people have read too much into the court's decision. the reason i think that is related to the question roger asked in the first panel. people in this field i think the world of corruption as far as the court thinks about his distinguished between quid pro
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quo corruption and this equality corruption. in that world, there is no corruption. what i have tried to suggest, and there was a brief that pushed this idea, is that there is another conception of corruption that is much more attuned to what the framers cared about. this dependency corruption. while i do not think there is a constitutional way to stop the koch brothers from writing a check for $10 million and spending it on a particular ad, i do think it is moved too quickly in that independent cannot possibly be regulated under this conception of dependency corruption. the reason that is true is because a dependency corruption does not reverse citizens united. i agree with the results of
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citizens united. they should have upheld the right of the non-profit filmmaker to spend the money to promote their films. if the first amendment means anything, it has to mean that. that is a separate question of whether it extends to every kind of structure. the broader perspective of what corruption is not distinct conception of what corruption gives you for thinking about that. there is legislation that will specifically build on that. let me add one more footnote about your anonymous donation point. bruce sets out a voucher system and really sets out a scheme for facilitating anonymous donations. it is a really brilliant scheme. florida tried it for judges. judicial races, the only way to give money to the campaign was to do it anonymously. nobody gave any money. once it was anonymous, all contributions dried up. even though i agree with an analytic point, this does solve a problem, but we are still left with a problem. how do you fund a campaign?
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all you have is $300 million. >> to me, the argument against public financing that resonates the most to me is, what about independent expenditures? constitutionally, you have to reverse buckley to start looking back in. there have been campaigns that to have tried, but a lot of it ends up being feeder more than something that really has any effect. i come at it from an entirely different place. i said this in my comments that money is a tool. it is not the end game. just because you raise more money than the other guy, does not mean you will win.
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if you look at different parts of the country, they are more expensive than others. i grabbed the numbers on my way here. to put it in terms, tv advertising is done in points. buying so many points will get you a certain amount of tv time for an ad. you have about a thousand points of television and they sell tv in points. in iowa, $85 a point. it is one of the cheaper markets now. tampa, florida, was $536 a point in august and october, $1025 a point. washington, d.c., $2,777 in
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october. that is close to $3 million for a week of broadcasts. public financing, how can you really seriously expect candidates to compete with that kind of money? maybe a hybrid system, i do not know. it seems to be somewhat unrealistic to think a system where there is a taxpayer about for an agreement that a party can be more coordinated so long as they are only campaigns that have public financing. i do not know where you go. the reality is the first amendment means what it says. it does not matter who is on the supreme court. one thing was authored by justice brennan. it does not matter so much at the core. where the line between that and campaigns are has always been
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fuzzy. the coordination will and what is truly independent, that is something i hear the reform industry use. the value and whether it is truly or totally independent. it is like saying, very unique. it is either unique or it is not. i think the idea of getting into this idea of reversing the burden and make people prove something that is totally independent turns the industry on its head. the court has spoken quite strongly about how even investigating folks can chill speech. a big theme in citizens united was how they took the fcc to task. i quoted the first panel. when you decide to get into
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this, let's try to have somebody who speaks with total independence, it is out of bounds. the risk is great because, what if in agencies like fcc, they try to ramp up investigations? what if we guess wrong? in this weird situation, you can regulate court's speech but not independence speech. but you are essentially regulating it. i do not see how you can correct the problem on independent expenditures. it is a reality that faces us and the cost of running campaigns faces us. something i was going to talk about but ran out of time was the role of the media. this is something the justice has talked about quite a bit. some of us put in an opinion long before citizens united, a
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case involving george soros. he had a book saying that things about president bush. they wanted to sue him. it was the three republicans who voted against him. it seems to me that was an attendant speech, not the sort of thing the law covered. the point i am making there is that one of the reasons we said we would not see him it is no more different than the media. when i was in private practice, i would deal with tv stations about tv advertising. they would like to say truth police and say your ad is not accurate. i would ask a simple question and put them on their heels. how much time as a local news
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spend on your election? generally the answer is zero. there are not a lot of ways to get people to get their voice heard, unless they do it themselves through independent speech. the court recognizes that. if anyone has ideas how to get there that is constitutional, we are all ears. >> so i took your question to have two parts. you have an answer to the legal part. the two different answers. but i thought there was a practical question. i will step out of the role of moderator to give a short answer. then i will turn the microphone back to john to close out. i think on the legal side, the phenomenon raises a very serious questions about whether a contribution limits. the question about any kind of
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public financing system is, if it will work, candidates have to step into it voluntarily. they will not step into it if you do enact it unless they can think about it. most of the proposals on the table now involves no spending limits. second, they involve means through which candidates are given incentives to develop alternative methods for fund raising so they can keep going. especially if you develop a small donor list, you can raise money quickly toward the end of a campaign. just to give you a number on this, not only were 80% of president obama's donors small donors, but 70% of disclose
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donors started off as small daughters. -- donors. at the end, they gave five times during the course of the cycle on average. these ideas are addressed in political terms in most of the bills that people are talking about now. in a way they were not in earlier proposals. i put that on the table for conversation later over lunch. to get us to that point, i want to give the microphone to john. >> thank you. and thank you for a great job. i would like to thank everyone for coming today. i would like to think our c-span audience for joining. a little bit late, we will go upstairs now. go up and you will find some of the books we have talked about today and a lunch being served. i would like to thank everyone
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on this panel, including mike as moderator and everyone who has been here today. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013]>> general john allen will not be coming commander in europe after all. the general completed a 19 month stint in afghanistan. the president said the general is retiring to address health issues within his family. the general was investigated for e-mail exchanges with a woman in florida and cleared of wrongdoing. earlier today, former u s ambassador to israel thomas pickering previewed the visit to israel and the possibility of
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military force being used by the usa in dealing with the iran nuclear program in a discussion at the brookings institution. >> this little book came to the conclusion that as of the summer, zones of impunity, community aside -- of nudity aside, israel -- community, israel had a delay of four years, maybe a little bit more. they related to different styles of attack, different capacities. none of them, in any book that i ever read, short of a permanent occupation on the ground of around has the capacity to stop forever. so the first thing we have is the military is a temporary solution in the notion that
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something will turn out with serious drawbacks and that is why it is on the table but not rapidly being used. from what the president has said, without excepting the challenge from benjamin netanyahu, he has basically said that if iran is going ahead to make a nuclear weapon, and we think we would know that, then he would be prepared to use military force. he did not say he would use military force first either. there might be things he would want to do before military force depending on judgments on time related to what you know, when you know it and how you are prepared to take advantage. he has rejected that as israel
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loses capability to achieve the two years, or the ability to get to two years, from his point of view that is not the reasonable, rational trigger for military action on the part of the united states. he has made that clear and the prime minister accepted that in his un speech where he put the delay and. -- the delay in. will we again argue about time and military force and when to use it? i have no idea. a lot will depend on the visit. i am delighted the visit is taking place. i was ambassador to israel and i would have fought for it in the first year. it is a logical, important step to take and something that was missing it should have been there early. i am delighted it is taking place now.
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it presents an opportunity not to resolve all problems, but clearly to see that the kind of tenuous and messy modus even be that we have, can that be continued on the time said because there -- time site because there is a clear commitment against the weapon, and on the other side there is no commitment that this has to take place by a date certain. that seems to be the feeling of the president and that is helpful to hold things. frequent forays into aggressive military stances without preserving a result are like frequent predictions that the bomb will be in their hands next year, and each one of them has been right only insofar as it far as it has been repeated on a regular basis. let me leave it there. >> we will show you all of
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today's discussion in about one hour, 4:25 p.m. eastern. more live coverage tonight with remarks from the former canadian ambassador about u.s.-candidate -- u.s.-canada relations including instruction of the keystone pipeline. earlier than that on c-span2, former cia director michael hayden discusses how digital media has transformed national security and intelligence gathering, cyber attack, and might touch on news that the chinese army is tied to a large number of cyber attacks against the u.s.. the house and the senate are out this week but president obama spoke to them saying that congressional republicans should accept more tax revenue to
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avoid the sequester, the looming budget cuts due to take effect on march 1. the president spoke today for about 15 minutes at the white house. [applause]>> thank you. good morning, everybody. welcome to the white house. as i said in my state of the union address, our top priority should be doing everything we can to grow the economy and create good jobs. that is our top priority and it drives every decision we make and it has to drive the decisions that congress and everybody in washington makes over the next several years. that is why it is so troubling that 10 days from now congress
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might allow a series of automatic, severe budget cuts to take place that will do the exact opposite. it will not help the economy. it will not create jobs. it will visit hardship on a lot of people. here is what is at stake. over the last few years, both parties have worked together to reduce our deficit i more than $2.5 trillion. more than two thirds of that was through some really tough spending cuts. the rest of it was through raising taxes, tax rates on the wealthiest 1% of americans. together, when you take the spending cuts and increased tax rates on the top 1%, it puts us halfway to the goal of four dollars trillion -- $4 trillion in deficit reduction. congress also passed a law in
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2011 saying that if both parties cannot agree agree on a plan to achieve that goal, about one trillion dollars of additional, arbitrary budget cuts would take effect this year. and the design was to make them so unattractive and unappealing that democrats and republicans would actually get together and find a good compromise of sensible cuts as well as closing tax loopholes and so forth. so, this was all designed to say we cannot do these bad cuts, let's do something smarter. that was the point of this so- called sequestration. unfortunately, congress did not compromise. they had to come together -- have not come together to do their job and we have these brutal cuts boys to happen next
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-- poised to happen next friday. if this meet: -- meat cleaver approach takes place, it will this a rate investments in education and medical research, and it will not consider whether we are cutting a bloated program that has outlived its usefulness, or a vital service that americans depend on every single day. it does not make those decisions. emergency responders, like the ones that are here today, their ability to help will be degraded. border patrol agents will see their hours reduced. fbi agents will be furloughed. federal prosecutors will have to close cases and let criminals go. air traffic controllers and airport security will see cutbacks, which means more delays in airports across the country.
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thousands of teachers and educators will be laid off. tens of thousands of parents will have to scramble to find childcare for their kids. hundreds of thousands of americans will lose access to primary care and preventive care like flu vaccinations and cancer screenings. already, the threat of these cuts has forced the navy to delay and at craft carrier that was supposed to deploy today persian gulf. as military leaders have made clear, changes like this, not well thought through, not phased and properly, affect our ability to respond to threats in unstable parts of the world. these cuts are not smart, not fair, will hurt our economy and
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add hundreds of thousands of americans to unemployment rolls. this is not an abstraction. people will lose their jobs. the unemployment rate might take up again. that is why democrats, the publicans, business leaders and he can't -- republicans, business leaders and economists have already said that these cuts are a bad idea will. they are not good for our economy. they are not how we should run our government. here is the thing, they do not have to happen. there is a smarter way to reduce deficits without harming our economy, congress has to act in order for that to happen. now, for two years i have offered a balanced approach to deficit reduction that would prevent these harmful cuts. i outlined it again last week at the state of the union. i am willing to cut more spending that we do not need. get rid of programs that are not working. i have laid out specific reforms to entitlement programs that
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could achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan simpson-bowles commission. i am willing to save hundreds of billions of dollars by enacting comprehensive tax reform that gets rid of tax loopholes and deductions for the well-off and well-connected without raising taxes. i believe -- tax rates. i believe such a balanced approach that combines tax reform with additional spending to form done in a smart, thoughtful way is the best job to finish the job of deficit reduction and avoid these cuts once and for all that could hurt our economy, slow our recovery and put people out of work. most americans agree with me. now, the house and the senate are working on budgets that i hope reflect this approach.
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if they can not get such budget agreement done by next friday, the day these harmful cuts begin to take effect, then, at minimum, congress should pass a smaller package that would prevent the harmful cuts, not to kick the can down the road come a but to give them time to work on a plan that finishes the job of deficit reduction in a sensible way. the cretin in the house and the senate have proposed such a plan, a balanced plan that pairs spending cuts with tax reform, and closes loopholes to make sure billionaires cannot pay a lower tax rate than their secretary. i know republicans have proposed plans as well, but so far they ask nothing of the wealthiest americans or biggest
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corporations, so the burden is on first responders, seniors, or middle-class families. they doubled down, in fact, on the heart -- harsh, harmful cuts that i outlined. so far what they have expressed is a preference where they would rather have these cuts go into effect then close a single tax loophole for the wealthiest americans -- not one. that is not balanced. that is like democrats saying we have to call -- close deficits without any spending cuts. that is not the position democrats or i have taken. it is wrong to ask the middle class to bear the full burden of deficit reduction and that is why i will not sign a plan that harms the middle class. so, now republicans in congress
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face the choice -- are they willing to compromise to protect vital investment in education, healthcare, national security and all the jobs that depend on them, or would they rather put hundreds of thousands of jobs and our economy at risk to protect a few tax loopholes that benefit the largest corporations and wealthiest americans. that is the choice. do you want to see first responders lose their jobs to protect special interest tax loopholes? are you willing to have teachers laid off were kids not have access to -- or kids not have access to headstart, or deeper cuts in student loan programs just to protect a special interest tax loophole that the vast majority of americans do not benefit from? that is the choice. that is the question.
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this is not an abstraction. there are people's lives at stake, communities that will be impacted in a negative way, and a lot of times this squabbling in washington seems abstract, and in the abject people like the idea -- there must be spending we could cut, waste out there. there absolutely is, but this is not the right way to do it. my door is open. i put tough cuts and reforms on the table. i am willing to work with anybody to get this job done. none of us will get 100% of what we want, but nobody should want the cuts to go through because the last thing our families can afford right now is paying imposed unnecessarily by ideological rigidity here in washington. the american people have worked too hard, too long, rebuilding
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from one crisis to seek elected officials cause another one, and it seems like every three months there is a manufactured crisis. we have more work to do than chu -- than to just try to dig ourselves out of self-inflicted wounds. while a plan to reduce our deficit has to be part of the agenda, but deficit reduction alone is not an economic plan. we learned in the 1990 costs when bill clinton was president that nothing shrieks of deficit faster than a growing economy that creates good, middle-class jobs. that should be the focus, they can america a magnet for good jobs and equipping our people with the skills required to fill those jobs and that their hard work leads to a decent living. those are the things we should push ourselves to think about every day.
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that is what the american people expect. that is what i will work on every single day to help deliver. i need everybody who is watching today to understand we have a few days. congress could do the right thing. we could avert just one more washington-manufactured pop him that slows our recovery -- manufactured problem that slows our recovery and that would do right by first responders, america's middle class, and what i will be working and fighting for over the next few weeks and years. thank you very much, everybody. thank you for your service. [applause]
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[applause] >> the sequester, the looming budget cuts on the mind of erskine bowles and alan simpson, the guests at politicals playbook brecht -- politico's playbook breakfast. the chief washington -- white house correspondent mike allen moderates this discussion. >> all of you following us on twitter, happy to have you here for the simpson-bowles playbook breakfast, appearing together, senator alan simpson and former house chief of staff erskine bowles.
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before we welcome them, i would like to say thank you to the bank of america for their partnership. the politicals -- the political playbook breakfast is grateful for these are conversations here. on twitter, playbook breakfast, and i have a question up here. i will be taking your questions here. we would like to welcome senator simpson and mr. bowles. good morning and welcome to a book breakfast. -- playbook breakfast here at -- breakfast. [applause]>> that is it. mr. bowles, you have soup on your type. -- tie. why is that? >> on behalf of america, for the
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people, by the people. everybody wants to know how you can entertain the fact that you want to cut medicaid and social security. [indiscernible]we would not have to have this conversation. tax refunds. pay your fair share taxes. a your fair taxes. america wants to know. pay your fair taxes. pay your fair taxes. pay your fair taxes. pay your fair taxes. pay your fair taxes. pay your fair taxes. >> this is a practical document
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, what you like -- i would have liked to have done and there were two pieces of news in it. one is that this is getting more expensive and will cost about $5 trillion. >> i am a retired civil engineer, i paid in the social security system all my life. >> we will bring you in the conversation. >> the cuts to medicare and social security have to stop. we want the corporations to pay their fair tax share. stop cutting jobs. pay your fair taxes. do not cut from here. [indiscernible]>> i agree very -- agreed aerated -- agree.
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>> 12.3 million americans -- >> they will address your point. [indiscernible]>> we need good jobs now. we need good jobs now. pay your taxes. we need good jobs now. pay your taxes. we need good jobs now. >> go ahead and address his point. >> if you look at the plan we are putting forward we call for broadening the base and simplifying the code in an aggressive manner. if you look at where the tax expenditures are paid, they are
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generally paid by people in the upper income brackets so in a progressive manner they will increase. >> that is not true. we have major corporations, and you are part of that, not paying their fair share. >> we need good jobs now. we need good jobs now. [indiscernible]>> we are really serious about this. >> so am i. >> all right. the second point i would make is if you look at what we are doing with social security, we give people between 81 and 86 and annual bump up. that is when most private plans run out. we have tried to be sensitive to this. the second principle is we do not want to do anything that
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hurts the truly disadvantaged, and we do raise the minimum payment on social security. >> in this plan you make it clear that neither side is doing enough. approaches so far have been band-aids. this is designed to be something that can be enacted. what needs to happen to create a runway that actually gets a deal? how do you create an environment where something big could happen? >> for us, what we felt that the end of last year was a disappointment like no other that i have ever experienced. we felt that was the magic moment. it was the time where we had the best chance to do something serious about long-term fiscal reform and responsibility and
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we felt it was a lost opportunity. as we have looked back on it, it has become clearer to us that if we are going to get a bipartisan deal we will have to push both sides to get out of their comfort zone and make the kind of compromises we need to make to get something done. >> senator simpson, what is the point of no return? you have been talking for a long time to convince people this is a problem that needs to be addressed. when is the tipping point? when will people really feel it? >> you will note how sweet i have been in the last few minutes, which is not my trait, however,, being a pugnacious old coupe from the university of wyoming, having been another 20 years younger, i would have
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been invigorated, but i still am. let me tell you, if anybody can not understand what we are trying to do, and cannot understand the sequester will do total disruption because it does not drive the engines driving us into -- can touch the engines driving us into eternity it cant work. it is on automatic pilot. if anybody can not understand what we trying to do with social security to make it solvent for 75 years they are lost in the swamps. the trustees of the system, wonderful americans, democrats and republicans alike, are saying that if you do not do
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something to restore the solvency of the system, which is $900 billion in negative cash flow right now, and you will waddle up to the window in, the drag of healthcare, the year 2031 and get a check for 25% less, you have to have rock for brains not to figure that out. if you are 81, figure this out. when i was 15 years old i put five dollars into social security and the cody bakery, making those sweet rolls -- i will never eat another one in my life -- that i putting in the army. then i practiced law for over 18 years, and i never put in more than $874 a year, then it went to $2000 a year, $3000 a year,
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self-employed. in 1984 when we were missing for this -- with this, the guide a retired got everything back in the first five years. there were 16 people paying into the system, and today there are 1 -- three people take -- paying into the system, and one taking out. the retirement age was at 65 because life expectancy was 63. now, life expectancy is 78.1, and in three years will be 80. wake up. forget the emotion, fear, guilt , racism and all the crap that goes with this, and use your brain, for god's sake. >> the point of no return? >> i do not think anyone knows
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when the tipping point will come, you will know it when it hits us. >> are we talking two years or 20 years, or 200 years? >> it could be two years. what we do know is the economy never moves as fast as you think it will but once it acts it quicker than you ever thought was possible. today, we are the best looking horse in the glue factory. we have the fed out there keeping interest rates really low. we are spending $230 billion a year on interest. that is more than we spend at the department of commerce, education, energy, homeland security, interior, justice, state -- actually, more than all of them combined and if interest rates were where they were in the 1990 pounds, we would beast , we would be spending
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$600 billion that we can not spend on research or infrastructure to make sure the jobs of the future are here and not somewhere else. >> i wrote down the tipping point, because i have not answered that question. dick durbin kept asking this question during our eight months -- "where is the tipping point?" i cannot tell you where it is, but the money guys -- erskine bowles is one of the money guys -- the tipping point comes when the people that have loaned us the money -- we always $16.4 trillion, and what we did last month will take us to $20 trillion in 10 years. the tipping point is when the people who loaned us the money, have to that is private, and the
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other half is public, and half of that is china. the tipping point comes when the people who have loaned us the money -- one people -- one of the presidential candidates said forget the money. that is a great idea except for the people that loaned you the money. you are addicted to debt, you have proven that, and people that have a dysfunctional government, and we will prove that again when we go to a sequester. at that point they will say we l want more money for our money, and at that point inflation will pick up, interest rates will go up, and the guy did get screwed the most is the little guy, the middle class that everybody babbles about day and night is the guy that is going to get hammered. the money guys will always take
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care of themselves. what an irony to listen to the distortion, the emotion, the stuff that goes on. we just keep plowing ahead. it is fun for me to irritate the aarp and grover norquist in equal measure. it makes your life worthwhile. they are out there, saying we will be savaged. anything we do, we will be savaged. >> senator simpson, when was the last time you talked to president obama? >> erskine is nearby. i talk with joe biden on the phone. i have known him for 40 years. a great pal. we do not always agree, but a good man and i love him. i suppose it has been about a year and a half since i talked to the president, but erskine has the ability to do that close by.
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>> when was the last time you talked to the president? >> right before the election. i have talked to vice president biden since the election and members of the white house team constantly, whether it has been jack lew or -- >> it is remarkable that you have not talked to the president since the election. >> i do not think it is remarkable. these guys have a lot on their plate. >> if joe biden were president would we have had a grand bargain? >> who knows? if bill clinton were president, would we have had a grand bargain? we need a grand bargain and both parties need to move out of their comfort zones. >> let's talk about those two sides. we will start with what you are asking democrats to do -- and needs to be $600 billion in deficit reduction from health
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savings. the last offer from the white house was $400 billion. you say they need to do quite a bit more. >> they do need to do quite a bit more if we are going to slow the rate of the growth of health care. >> how do you convince them? they will argue that they have been aggressive. how will you convince them that that will not get the job done? >> we have to convince americans they need to do more on health care than they have been willing to do to date, and republicans have to do more on revenue than they have already done. >> specifically, you say there needs to be more revenue from tax reform, whereas republicans have talked about that being revenue neutral. >> that will not get the job done. if we do not do something on the revenue side it puts too much harsher on the rest of the
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operations -- too much treasure on the rest of the operations of the country and we have to make cuts that are too big in either income support or cuts in areas we need to invest in to be competitive in a knowledge- based, global economy -- things like education, infrastructure and research. yes, we are recommending that the $2.4 trillion is step one. we recommend that one quarter comes from revenue, one quarter from healthcare cuts, and the remainder from cuts in other mandatory spending, discretionary spending, interest on the bed, and going to the change cpi. >> what is the most important change that needs to be made to entitlements? >> we need to stabilize the debt and keep it on a downward path. >> specifically, what mechanical change needs to be made to
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entitlements? >> a lot of things need to be done. i would not say just one thing. we need to have more cost- sharing with appropriate protection for low income beneficiaries. we need to have means testing. we need to get serious about population aging. we need to have tort reform payg manufacturers, and we need to pay for quality rather than quantity. all those are important. >> and you have to take care of the guy who pays for the building who does not even get a bill. anyone who believes these -- we can get these health care systems to work, you can take care of a three-year-old who can live to 60, you have diabetes a and b endemic -- if we do not
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pay attention to this aging issue, nothing will work. we got to do something with tort reform. i am an old trial lawyer. my son's sake, pop, what happened to you? you got to do something with doctors. you cannot keep doing a doc fix. last time we did this, it was in the law. it will cost us $220 billion over the next 10 years. this baby is in automatic pilot. it is extraordinary people say you cannot touch medicare and social security -- you did not have to give a tax increase to gain the ire of grover. you do not have to do that. you go into the tax code and you
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say, guess what -- you what a stimulus? everyone says, what the hell do you think a deficit of $1 trillion-plus is? that is what a stimulus is, and we have done over a trillion bucks over the last four years. going into the tax code and ripping around in it, fun to do that, that will irritate everyone. there are 180 of those babies in there. >> 180 what? >> tax expenditures in that tax code. they are loopholes or deductions, all the works, and guess what -- only 20% of the american people use 80% of that. run that through your court again. only 20% of the american people use 80% of them. only 27% of the american people, itemize on their tax return,
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which means 3/4 americans have never heard of those. who is using them? me? you? \ the media? anyone who has a little buck is using those babies, and they suck $1 trillion-plus out of the treasury each year. >> do you believe tax reform this year is possible? >> yes, i think max baucus and dave camp are trying to do something, and they know what to do, but the heat is on. tax reform, you want to mess around with home mortgage deduction, who cross, blue shield -- played the game. 180 of those out there, and they are solidly in the grasp of
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somebody who is on to go to their congressperson this trip around who they have maxed out on every primary and on every general and they will come to them this year and say we have never asked you for a thing, but, pal, we're here to ask you do not this happened. it took us years to get that into the tax code, and if you let that out, with all we have done for you, and, boy, that is where the hammer is coming this year. >> there is a headline that says employers size up fines to avoid insuring staff under obamacare. they are calculating whether it is making more sense to pay the fine. that will shift a huge cost burden to the exchanges. are you worried about that? >> i am worried about the cost of health care. >> as we travel around the
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country and we talked to various business people, they are worried about the increased cost and they are shifting some people to of less than 35 hours, taking a lot of steps that they do not have to cover, people that they have been covering, particularly in retail. i have anecdotal information, so i cannot give you any economic data, but i can tell you i've seen a good bit of it as we have traveled around the country. >> people saying they are going to try to avoid obamacare by cutting back hours or by paying fines? >> correct. one of the consequences is people will be shifted to exchanges, and increased cost, and that is why we want to bring down health care and make recommendations for the cuts that we have in the health care program in order to slow the rate of growth of health care on
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a per-capita basis to the rate of growth of the economy. >> a small business person said how much will the fine be? they told her and she said, to hell with that. i will pay that. and move on. >> do you think people will feel like she does? >> anybody who is employee anybody or trying to do jobs and all the stuff that everybody is really talking about and should knows you have to do something with this health care system. it is going to continue and what we have determined as automatic pilot, and we have said let's lop $400 billion and let it not go over 1% of gdp. you should put something in there with triggers and restraints, not letting this thing go up over 1% of gdp a year, which drives it in a
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whole. >> there are two sides of echoing pick anybody in this room who does not thinking 35 million people who do not have health care insurance do not get health care, you are wrong. they're getting health care, just getting it today at the emergency room at eight times the cost of being in a doctor's office. it gets shifted and gets cost shifted to you in the form of higher taxes and insurance costs. >> there is an assumption among the editorial pages of america among reporters that when president obama gets the opportunity to do the right thing on entitlements, that he will, he will be willing to make his party do tough things. but we do not know that foreshore. how confident are you that this president will do the right thing on and tenants if he dogets the chance?
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>> iran on this on the election, and he attended to do it. incrementally, perhaps. >> why wait? >> am answering your question, which is a good thing. [laughter] he knows what to do, and if he does not get a handle on the entitlements and the solvency of social security, he will have a failed presidency, and if he wants to have a legacy of fdr ii, whenever that drives him, that is fine with me, but he will have a failed presidency unless he deals honestly with the entitlements programs without cutting the poor and the wretched and all the rest and all this stuff. and getting something for social security, then the scorecard in years to come was he failed. i do not think he wants that at all. he is too smart. but the president is going to
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have to make these really tough cuts in health care spending. he is going to have to take the actions that make social security sustainably solvent. he is going to have to make additional cuts in the defense and non-defense budget, and he will make those tough decisions, but republicans in the house are also " have to make a tough decision, and that is we have to reform the tax code which everybody wants us to do, but we're happy used a small percentage of that money to reduce the deficit. it is not placed too much of the operating structure of the country. >> the one person in the white house and that republican leadership who is most authentically committed to making these tough choices? >> the one person in the white house most authentically committed to making these choices is the president. i have met with him several times. i believe he is willing to make these cuts and that we have to
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make pit that does not mean i do not want to continue to push him out of this comfort zone to go for the that he might want to do otherwise. we're going to have to push him if we are part get a deal republicans, and we are on tap the bush republicans to do that tax reform that allows us to do the deficit in the same manner. >> how do you push a president? >> the way i have done it is speaking candidly, not agree, but tell him what you think, and why pick this is a smart guy. he will understand it and make the right decision at the end of the date. >> or we could turn joe biden was on and, because he can to the senate when joe was there as a senior member, and joe took him under his wing, and he listens to joe, as you with a senior colleague, and joke is always pulled out of the hat, the rabbit in the hat, to do
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something, and that is their role joe has. joked as a remarkable ability to communicate with him with-- joe has a remarkable ability to communicate with him. >> what are you referring to? >> joe has his ear. get rid of the political guys and say let's do some policy now. let's do something for america. the political guys have all gone home now, and they were there for a purpose, and it worked. getting reelected, and then we will work out the details later. they are gone, all into academia now, and so maybe they will sit down at a policy for the best interests of the country without a howling, tricking, wail of the coyotes to bang your brains in.
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>> out its domestic -- how optimistic are you that it will happen this year? >> it will happen in his four years or yes no legacy empiric if he cannot cut the mustard a solvency of social security under honest appraisals of the trusties, and he cannot get a handle on an automatic pilot reg of health care, he will have a failed presidency. >> we were talking about the sequester, which most people in the room believe will happen on march 1, automatic cuts. mr. bowles, you refer to them as daumb, stupak. >> they are dumb and stupid. they're stupid because they are inane. ears the business in the country that makes cuts across the board.
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you try surgical cut those things that have the least adverse effect on productivity. they are cutting those areas where we have to invest in education, infrastructure, and they do not make any cuts in those things that are growing faster than the economy. that is stupid. >> yet it sounds like when the sequester kicks in, that may be a window to do something big. you were chief of staff during the government shutdown. tell us what is going to have march 1 when they kick in and why that might be a chance to do something big. >> when you have to go to write an airport and wait in line three hours to get through security, you will be pissed. and so is everybody else. you could use a lot of different stories just like that, and when that happens, they will come back to congress and say we're sick of this intransigence, let's get together, let's do something smart, but the partisanship aside, let's pull
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together, and let's fix this debt. >> senator since and, many people have seen the video of you, a little harlem style? did you pay for it? >> did i pay for it? >> a harlem sheik? >> they handed me this condense said instagramming your breakfast. i said, what that hell is that? and then they said, stop tweet ering. we figured we made were hit with the young people that if we did a national bus tour.
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they are a great group. the can kicks back. >> do you think they will do the been -- do it again? >> not by me. >> you have been getting more into social media. you're on the facebook board and on facebook. really with it now. i am old, bald, nine grandchildren under 7. you got to stay as current as you can, and whenal and i first got into this deal, we thought we were doing it for our grandkids come but the more we look at numbers and the country's financial condition, we realized we're not eliot for our grandkids, not even doing it for our kids, we're doing it for us to offer the country.
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we have got to put our fiscal house in order. the cannot be the first generation of americans to leave the country worse off than we found it. >> the point you make is it gets worse the to buy the debt because we get more into the baby booms cause of inflation, because of growth. this problem is getting more expensive to fix. it 2010, there was $4 trillion over nine, now it is $5 trillion over 10. how fast will they get too expensive to fix? >> there's nothing more powerful than compound interest. we are spending $250 billion a year on interest today. we will be spending, if interest rates were at their normal level, hundred $50 billion. it will not be long before we're spending $1 trillion a year on interest. that is $1 trillion we cannot
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spend in this country to educate our kids to build our and for structure, to do the high-value- added research, and unfortunately, since we are borrowing some of that money come principally from places like asia, it is $1 trillion debt will be spent over there to educate their kids to build their infrastructure, to do the high-value-added research in those countries. the jobs of the future are there, not here. that is crazy. that is what we have to stop. that is why we need to use something out. them whereabout to get the hook, somewhat an ultimate question for you, did you read "the price of politics"? >> i did, and there some quotations there that i would like to smash back, but i did. >> what do you like about bob woodward? >> you ought to be alert. [laughter]
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every time he came to my office, i was alert. we would have lunch and he never misquoted me at all. he has an amazing -- i do not agree with him in all respects -- but he has an amazing journalistic pacman, which is startling, and the buck has stuff in it -- and the book has stopped it it that is real. >> did you read it? >> i do not remember. i probably would at if he called me, but i do not remember talking to him, but i may have. i do not do a lot of that. it is not my favorite thing to do. >> how close do you think we were to a grand bargain? >> i think it was realistic. both sides were prepared to make a move. if you look at the end of last year, they were prepared to do more revenant, they agreed to do
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more revenue than was in the fiscal cliff deal. they agreed more health care cuts than have been done to date, but what it was both on the beneficiary and provider sides. they agreed to do other mandatory cuts that was everything from agriculture to federal retirees. they agreed to do cuts in defense and non-defense beyond what is in the budget control act, and they agreed to do a chained cpi. at would have been a positive step for. it would not have solved the problem because it would have only gotten the debt down to a 73% of gdp. we have got to quit focusing on these next 10 years and focus on the out years. that is why we need to make social security sustainably
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solvent, why we have to slow the rate of health care and get serious about ending the cost care curve. >> said that these guys were this close in december, then we will pick up from there and move it along. that is what this is coming not since and-bolts or bulls-some said. it is do something. >> if not president obama, who? there's a short window here. if sides are to dug-in here, three years from now, there will be a new window to get things done. what do you think it will be if it is not president obama? >> at the beginning of president clinton's first two is now is the opportune time. what we need to do is to quit complaining and pushed these guys to make the compromise they
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have to make in order to get something real but that puts our fiscal house in order. >> he spent hours and days in his work, the last person to balance the budget in the united states, by working with newt gingrich and dick armey. he often says he only won, but he is that kind of savvy, mr. steady, if he cannot at ayer admired and deeply, watched him, he is a tremendous man, the best of the best, if he with his skill and negotiating skills cannot get us there, it will not get there, and the markets will do the shot. they do not care a whit about who is president or a whit about democrats or republicans. they care about them, and if anybody cannot figure that out -- they have walks for brains.
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but senator simpson, you will have the last word here. >> god, i did not want that. >> tell us what will happen to the markets at happens? >> what is the word you used, you money guys, the word when they want their money and they are out there could not panic. we do not want to use that word. that is that the big point. i do not know what it is, but i know the law we stumble and looked as unbelievably and able to function, even talk with each other, to visit with each other, to sit down, as i used to get ted kennedy or tip o'neill -- that is what i did. that is how i was successful. i was a legislator. i came to legislate. until we see this opened up
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again -- and it will open up again when the markets call the shot and inflation kicks and an interest rates go up and the people of america say, who did this on his watch? you were here, and you did not do a lick, and your out of here next time. that will be the beginning of this solution. >> we thank you for watching. we thank bank of america for making these conversations possible. we thank all of you who came out early for this. we thank erskine bowles and alan simpson. that you very much. >> the can nadine ambassador to the u.s. -- the canadian ambassador to the u.s. is part of the discussion on u.s.- canada relations. they will focus on energy, environment, and tray. that is coming up live at 7:00.
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on c-span 2, michael hayden discusses how digital media has transformed national security and intelligence gathering. he talked about potential threats from cyber attacks and a touch about the news from this weekend that the chinese army is tied to a large number of cyber attacks on the u.s. that is at 6:30 eastern on c- span2. >> communism of china is in name only, and preserve the power of the members of the communist party, but they basically through most ideology aside ideologydeng opened up the country. the capitalism now in china, the talk at great length at congress as about lynn then -- lenin. they threw aside most messages of communism and longtime appeared in north korea, it is
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about preserving the power of the military and the kim dynasty. it has nothing to do with what karl marx envisioned as communism way back. somebody could do a fascinating book when it moved into asia, marched into something different than the common doesn't that appeared in europe in the eastern european countries. that is a fascinating split that occurred. >> 34 years of reporting and insights from around the world, sunday at 8:00 p.m. >> a discussion on the state of iran's nuclear program and a framework for talks between the u.s. and iran. thomas pickering, who previewed israelnt obama's trip to next month.
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this is a 90 minutes. -- this is 90 minutes. >> ok, good morning, and thank you for turning us. at the end of a holiday weekend, are here at this morning to discuss an issue that is in the headlines about daily, but i think will continue to occupy a great deal of attention here in washington and around the world in the coming year. there has been so much discussion about the desire of the u.s. electorate, as reflected in the vote last november, to reduce its engagement in foreign affairs, broadly, to shy away from new entanglements, and to turn its
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attention perhaps a bit more away from the middle east and toward other parts of the world, and we have seen the intentions of the administration in that regard, but of course, here in savant central, the middle east does not wait quietly for the administration to of devote attention that. it demands such attention. i think on no issue is that more cleared this year than on the issue of the brewing confrontation with iran over its nuclear programs. there have been a number of recent developments on this topic that make it were the of a renewed discussion, and i cannot think of anyone i've would rather have on our dais to help us think through the approach to the challenging issue than ambassador thomas pickering. >> very nice.
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we do not always get that on tuesday morning. >> tom is among his other, it's -- tom is a fellow at brookings, and we're glad to have the opportunity to bring him here at the stage. he is a retired u.s. diplomat with a distinguished record, including service in the middle east but also did major global power like russia and india, who are playing very interesting roles in the evolving to thomas e. over iran. welcome. and along with time we have our own kenneth pollack, senior fellow in the center, and ken is finishing a book right now on the challenge of iran, which you will be able to look for in
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books first later this year. we're happy to have ken with us to provide comments on this topic as well. what we will do is we will have a bit of a conversation up here, and then we will open it up for questions from before. -- from the four. why don't we jumped right in with some of these recent developments. there is not a date set for the next round of international negotiations to be held in a distinguished diplomatic capital. one wonders if that quieter location will allow distance from the glare of the cameras. do you expend much progress -- what you expect from these long- awaited talked? >> that you very much. it is a pleasure to be here.
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i cannot think of a more bountiful crop to bring in out of the rain, for what has been the longest-running non-defense in discussions about iran in this town for some time. i wish i could say i thought that almati would produce something, but the reality is it seems to me to be pretty unlikely at the moment. you have pending internal process these iran, leading to the selection of a new president and the summer. and inauguration sometime in the autumn. that might well be a time of stasis, but on the other hand, because you can get any point of view from any iranian you talk to, some are talking about an opportunity. we will have to wait and see. the rocket that shot off at munich in bilateral conversations launched by vice
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president biden and seemingly supported by the foreign minister for a few seconds fell on on fertile ground somewhere. that does not look like it is a good omen of good things to come. there are opportunities in alm aty. since this all the talk about a grand bargain is probably a massive amount of overreach given the extent of mistrust and misunderstanding, but this is typical diplomatic thinking, and it could be overturned. we see very little signs of what one might call a kind of america wes and 8-kissinger secret trip to beijing in the offering. one could stand that kind of surprise, but i do not think that is in the offing. the other side of the question is something very small could come out, that might even help to strengthen the mistrust that
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is so severe. the supreme leader on one hand seems to be saying it is perfectly ok to top at p-5 plus one, but sitting down with the devil is not in the cars. the devil has to change his outlook on life. as we know, preconditions are not a very good way to set the stage for moving toward something successful, although these preconditions seem to be separate and isolated, apparently, from the bigger set of talks. the problem with a bigger set of talks is probably at the moment too many moving parts, too many people, in the room, too much difficulty in getting even a kind inter-allied point of view on the table in a way that might even be encouraging to the supreme leader as opposed to the other way around. i would say chances are very small, but i would be very happy
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and very grateful to be surprised. small chances in my view have more to do the possibility of a small agreement, even a minor one would help, one could say the best expectations at the moment are that they will be set another date and even another place, and that in of itself will be encouraging because we know the rounds of the dish reasons that took place before 2012 always ended in one day with pretty much white disagreement and with the task of the negotiators to spend the next year figuring out where and when to meet again. if we could get over the procedural hurdle, that would be some small, but not very gratifying, dividend. >> as you look at how the united states has prepared the ground for this set of talks, you noted the mission of bilateral talks fell on unfertile ground.
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one reason that was put forward as there were those arguing that was what the iranians really needed to feel reassured, they need it the direct engagement with the united states, to probe on whether the u.s. is truly interested in a deal or is really just interested in changing the regime in tehran. they meet the reassurance that direct bilateral talks could provide. the you think the obama administration has constructed an approach that response to air ronyon concerns and that can solicit a meaningful response? , i think they have tried hollered, and they have tried in the numbers of times to reach out, and it is hard to see how one could overcome this, except perhaps for some actions that we might take that would be demonstrably difficult for a u.s. domestic relationships, and
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indeed for a process and a significant down payment without any sense of return. i find that hard. i think the iranians in their own view have reason at least argue that we are not serious and all we want to do is remove their urging. we have reason to argue on our side that they are not serious and all they want to do is going into a giant schlep until they are ready to make a nuclear weapon and see if they can slip that past. i think it is a stupid thing to be thinking about, and as ken minded they cannot there was a robbery iteration of the fatwa over the weekend with a challenge if we wanted to do it, we could do it and nobody could stop us, but that is not what we want to do.
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there are a lot of them. to some extent, interestingly enough, clinton said we ought to sit down and say if we could make the fatwa to a prevailing reality, and that is an important part of the approach. >> what would that look like? but it would look like the kind of agreement that many people have written at thought about. in my view, four points at the end game would be very poor and to establish, and to swallow. one would be basically accepting befatwa, making it a reality by building it into the iranian civil program, what i would call significant, even if terrance to civil objectives, so you would have some idea in quantity and quality come much enriched uranium they really thought they needed and could agree with either to fuel the
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20% using reactor or provide the only logical reason why would they would need fuel is in case the russians renege. they have a 20 reactor plan, but we do not see any money being put in the new reactor built or any contracts or anything moving. that part is fairly chimerical. hope the supreme leader understands what our doubts are, some head, producing a lot of low-enriched uranium with no purpose other than perhaps legitimately to guard against russian malfeasance. that in an of itself with the substance -- subject to quantitative meditation. we need to build into an iranian program something that provides something like the best of all possible guaranteed against break-out. i believe the iaea ought to the
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commission to say what do they need to inspect that program? the additional protocol, but i do not think the additional protocol is the end of all -- but -- inspection technology. we have had experience with iraq. they have developed new t echnologies. they say we only want a civil program. when our side, two things have to happen, at the end of day. one is those sanctions related to the nuclear program should come off gradually, as the kind of program i have talked about on the iranian side gets and let the, at second, we would accept but it would be de facto in accepting our limited civilian program to enrich, which they keep saying that want to put on the table. they go together. that kind spell-out seem to be possible. getting there is a problem. it has to be insteps and stages.
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you have to be sure it is going to work, and even if you can sit down and describe what that might be, and i may not have all the ideas, but those seem to be the central ideas that you should have on the table and a way to proceed is any number of choices about significant steps that they would move to lock in their civil program that we would move to take sanctions away. >> i cannot help but feel the more we talk about this issue and what a deal could look like that the iranian nuclear issue is becoming like the israeli- palestinian issue, where we say we know what the deal looked like, but is a question of whether how we can get there. do you think it is possible, taking the incremental approach that, is talking about here, to get to that kind of deal? >> i think you are focusing on the exactly the right thing, to build on the points that tom has may pick this is a moment as we
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are thinking about reengaging with the iranians to think about the big picture. i agree with tom. i did not cede breakthroughs coming out of almaty. is a moment where we need to put down important markers we need to say we are serious about a deal and would be willing to lift the sanctions, and i go beyond that pick, i like to see the u.s.a. we are willing to provide more meaningful benefits in return for their billing estimate the kind of compromises that we need from them, along the lines of what tom has suggested. what you are getting at points to some bigger-picture issues. on the iranian side, the iranians need to ask themselves whether they are willing to strike a deal and live by its. i agree with tom, the iranians have been hinting broadly at eight pit, i think the iranians have been put out there the fact they would be willing to stop at
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the 19.75 level of enrichment, they would be willing to accept the additional protocol, a going beyond that. you can probably see the outlines of that deal. united states for its part has kind of hinted at that as well paired on our side we have a lot of work to do. while it is the case that the incremental approach can get us there, it is only going to get us there if the united states is willing to accept the end state pick the end state is going to be an iran that is limited, that is bound by inspections, backed by the threat of renewed sanctions, but ultimately is gone to have some enrichment capability. one of the things i worry about is whether the u.s. government, the whole u.s. government, is going to be willing to live with that. >> bite that you mean within
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the second branch or congress? but within the congress, but in the executive branch as well, and we are are to have to say, can we live with this book if we keep saying no to the iranians who are not allowed to have a capability, i see it is as making an enemy of good enough, a perfect i cannot think we will ever achieve. , i agree -- >> i agree. it seems to me that you have to crack to this barrier. in 1994, after i had spent weeks beating the hell out of russians on no nuclear program on iran, and they said why? they have not done anything wrong. in the end, we can sell them a reactor. i went back to washington and said maybe it is time for us rather than to do the right thing to years too late, go
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after an iranian program and make sure they did not get into sensitive facilities, enrichment and reprocessing paid i never got an answer to that. then notion is that we have essentially been right about how to deal with the iranian program, but four years too late. i think that is right, and i think no in richmond is splendid if you could get it, but i do not think you can get it. you can get limitations and firewalls with the iaea, the best you will get them up at diddling around means in fact that their effort which is sincerely bread want to go -- they keep talking about being like japan, having the technologies necessary to go if they should decide to go -- is something we need to take into
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account. i think they are there or practically there and we can argue about this and that. i would like to see the amount of enrichment material, some real relationship to a single program and its needs, which would put it below the danger point rather than above the danger point that they have a whole lot of and can move very quickly and it will be done deep underground and have all those concerns. we keep hearing from them that is what the what to do, but we cannot seem to get all of what i would call the loan the year of four or five years ago when we were convinced that lowest common denominator had to be and no enrichment. i suspect we're there because there are enough people out there and the president and others are not willing to break the tie. i have to admire clinton. she said about a year ago that she felt it would be possible to get toward a program where there
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was some enrichment, but it had to beat down, at least in that direction, and she was putting it on the table. what you are talking about but we have not done concrete enough, it to some extent, a proposal that was either inherently or explicitly in that direction, and i laid out for you what my end-state goal would be, we would hope we get over that hurdle. because i think it is important, would like to see is in beijing and negotiations for two reasons one, because i want them to succeed, but if there are to fill, i want to know sooner than later. >> can i probe for amendment on the international dimensions here and as it relates to the question of enrichment and sanctions vacant you both seem to act and to size the idea that getting the iranians where we would be comfortable with them being on enrichment means putting forward the real prospect of sanctions release
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and more carrots. these sanctions were so painstakingly constructed and they are in there and implementation and enforcement so carefully in balance, the u.s. and others have some cost here, is it possible to wield this lever with that kind of fine control, given how difficult it has been to put this package together? >> i want to intrude a word from my sponsor, because this is a book on the cost and benefits of benefit -- military action against iran, which we put together. that came out in the summer, and in december we did a similar one. we attempted to try to of what recommendations and to let the
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books before it's out. the notion is sanctions have been in place for 30 years. they involve the concerns over the treatment of their own citizens, in human rights terms. there are multiple purposes. they come in multiple ways. some of them have been done to the u.n. security council, and as you know, ken, you and i are speaking here is because the resolution says no and richmond. having worked in the security council, they can pass another one supporting any agreement we could reach a deal with that case, but the british parliament, there are rules about revising their position. the third thing is our domestic sanctions it plummeted by legislation, and some by regulation, under the
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legislation, and then we have the e.u. sanctions and others that people follow mandated by the security council. the e.u. seems to be more flexible than we are, said it is operating room there. there is operating room in not putting more sanctions on the that could be helpful as an initial step. that would be important. each one of these the president would have to explain he is getting value, that the europeans to take sanctions off central banks and petroleum, for reasonable. that we could do things that i think are absolutely necessary. we have had a longstanding policy of not sanctioning food and medicine for good reasons, and when i was in the security council, in iraq, we made it carefully. that got screwed up and oil for food, and i did not want to talk about that, but that was an
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example of how things could go wrong. the basis was the right basis and that even in the worst of all possible situations, you cannot punish the population, particularly, for the sins of their leaders' summit if they did not choose the leaders. we have a situation where we have brought beaten the banking community to the point where they are the concern even about allowing finance for food and medicine privileges if the iranians were prepared to do that, and they have been doing that. we have given licenses over ofac feud. we created a barrier to see that consummation, and we should clearly find some banks we trust in iran who are prepared to finance that. we have to find more than one. we have to say we are prepared to license you banks to do the food and medicine purchases. we get over this hurdle. i for a long time have thought
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while it was important for us politically to punish iran by keeping it out of the energy business with pakistan and india, at some point early in the came the permission for that pipeline would be import. because two important u.s. allies are prepared to open an energy window, not the only one, but i am convinced that good pot plants make good neighbors. to some extent, -- that could pipelines make good neighbors. while iran might benefit, there are multiple benefits for us to realize we are shooting ourselves in our own foot moat. there are a lot of things that want the decree a bleak here in the early stages, and that would be the testing time. once things work, it will be easier to convince people to take them off. i am a realist.
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look how long it took to take sections of russia, even though they were not implemented, over the jewish emigration. but how long it has taken us in some of the other venues it even after we invaded the government in iraq, we have sanctions against iraq for a long time. the contrast is not move at the speed of light. that particular -- is the reason why we should move. one final point on ken's important piece -- there is the question of what to do what beyond nuclear, and to some extent, the complexities are large, but we in my view should not close the window in any serious way to dealing with other questions on the agenda provided obviously nuclear gets a hearing paper in part, because there may be things we could do which are the
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equivalent of taking off sanctions in benefits in other areas that could be helpful. that would be a positive offset, even if you cannot call the sanctions off, that could help you make a nuclear deal work. i would not do that. i would not go in with the table, which every issue the third with confusing ideas and all kinds of things, but if the iranians are prepared and interested, then we should take a look at that and see how we can get. over a period of time, finding a way to expand the envelope and include other benefits in a negotiation is difficult and an option that we should have and we shall not lose sight of its .it it could complement this. i thought you were heading there, but let me just take it there. >> is an issue here as we talk
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about expanding the arena for negotiations so one could find other incentives to bring to the process. we have to get iran in the region, and the u.s. in the region, and the way these other regional dynamics, the turmoil of the arab awakening, and the conflict in syria, is shaping the environment within which these talks will take place. i wonder if you could speak to that as a little from a an error ronnie in perspective and from an american perspective --how do these original -- how the these regional developments play? >> potentially both sides can imagine they would be. the reality is they cannot. these regional events are taking place based on dynamics of their own. our ability, iran possibility,
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to ship what is happening in syria, egypt, yemen, bahrain, is limited. there is a strong temptation in our parts to try to do so or clan, and that is the case on the iranian part. the reality is we all know that these countries are being driven by forces internal and inherent to themselves. it is -- it goes to the point that thomas nike, which is what is going on in the region ought to give both of us more of an incentive to come to an agreement. what concerns me is if we are not able to reach an agreement, it is going to drive us to a place that will be much harder for but the iranians and americans. on the american side, the choice is obvious, is if we did not get a deal, that we are going to
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face the worst choice of all, the choice between going to war with iran or living with a nuclear iran. i have my preference between ms. two options, but both of those are terrible options, and the greatest incentive for coming to this kind of an agreement is that we do not have to face that, and my fear is that the very incremental thinking of i do not like this concession, that concession, is gone to drive us to that ultimate choice. that is my great fear. on the iranian side, they too will have some terrible choices to make. do they go ahead and weapon eyes and say basically to help with the entire world, we want these weapons, and we're willing to pay the price, and for them at prices might mean becoming north korea, which is something i do not think iranians want to become. a state that has nothing going for at, but its nuclear arsenal,
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or the alternative is going to be making some very significant concessions that they did not seem to want to make. for both of us, if we're not want to make that deal, it drives us to make choices that ultimately are awful, much worse than what we could do right now. i think at the end of the day, what is going on in the turmoil in the region contribute to those points. when you think about either living with a nuclear iran or going to war with iran in the context of the turmoil, those choices are terrible, it is much worse in the context. given what is gone on about the choice between nuclear rising in northng number co-- korea make these choices more offer than they would be in other chances. >> obviously , we have not talked about it, and i agree with you on the military option.
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it is not off the table. it might be north korea on what is the negative of steroids. i do not know. the iranians did not have massive artilleries zeroed in on some nearby friendly city. we need to take that into account. on the other hand, i agree with you that iranians have a long tradition and a great interest and they want to be a power in the region, and one question we have to resolve, while we cannot dictate it, is what our role in the region will be in the future, what their role, what our arab friends' will be, and the best possibility is going hand-in-hand into the sunset and everything is splendid. you could think of an organization. that is far down the road. the second question is that while and be nice to say there is gone to be a line in our
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discussions with iran, if they ever get engaged, if we get into any kind of gear, between the regional to the elements and the iranian bilateral issue, number one, the clear, but perhaps others, it will be hard to do that if the iranians think there's traction to be gained in dealing with the process. one of our problems is not being able to expand the nuclear question. the other problem is if we expand it to where we get into this mess of too many moving parts situation and does that lead to a set of negotiations, which are engaged, but to anclusive, as opposed alternative of not being gates at all, i would rather start by being engaged. i would rather start small than they pick it is important however to be open to reasonable and ad-ons, but the
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guard against having in fact everything have to be discussed before anything can be agreed to. those are the tasks of diplomats once they engage in the process. to some extent, one of the secretive as a diplomat is make clear to the other side very early on how you will judge the initiations. another question you have to resolve is the fundamentals. we totally distrust their combat and on not making a nuclear weapon. they totally distrust the numbers of times we have said we are not interested in pushing change. there are things that we could do, including for example either being willing to discuss any single event that they interpret as regime change, or set up a hot line or began in some ways to take a set of actions, maybe not with respect to the nuclear program, but maybe as alleged with respect to other activities that would take -- ease